COVID-19 effect on defined benefit plans
Our new white paper covers the impact of COVID-19 on defined benefit plans in the Russell 3000 from information gleaned from Form 5500 filings.
Key Findings:
Current economic downturn and likely cut in stock dividends caused by the COVID-19 pandemic could lead to financial pressure on companies with under-funded defined-benefit plans.
Approximately 27% of companies in the Russell 3000 still have a defined-benefit pension plan.
Companies with a high target normal cost and a high concentration of active defined-benefit
plan participants will have additional liability in the form of future company contributions.
Companies in the air transportation and retail industries that are historically vulnerable to plan failures and low funding ratios have a more significant problem during the current market downurn with “at-risk” underfunded defined-benefit plans.