News

April 24, 2009,

Planning your way out of the financial crisis

Few people could have foreseen the severity and impact of the present financial crisis. Back in 2007, the headlines were full of company pension plans moving into the black and of healthy reserves. One and a half years’ later, these same company pension plans are in the news again – this time with dire warnings of underfunding and the freezing of indexation. Some pension fund managers will have seen the storm coming and fully derisked their pension funds, but many didn’t. The reasons for not derisking are various, but the consequences are painful. Why didn’t more companies and pension funds take the opportunity to derisk – and what can they do now?

This time, things are different

The white paper 'Planning your way out of the financial crisis' looks at why pension funds have become such an important issue for CFOs and why companies – and pension fund trustees – should be planning to derisk their pensions. We show why the effect of this crisis on pensions internationally is different from the effects of previous crises. We also discuss how new reporting regulations have led to an increased visibility and understanding of pension fund risks, and reveal how different national and international regulations make it increasingly difficult for the CFOs of internationally operating companies to forecast and manage the impact of their pension funds on the corporate balance sheet.

Regaining control of the corporate balance sheet

Paying particular attention to the UK, the USA and the Netherlands (some of the largest, most mature second pillar pension markets), the white paper explores the effect of the financial crisis on the pension funds of multinational corporations.

In conclusion, we offer some useful guidelines on how to draw up an effective roadmap to derisking, making derisking more affordable in the process, and which actions can – and should – be taken now.

Read more in the Summary (6 pages) or download the full white paper (20 pages).

Jeroen Bogers, Product Development Manager, AEGON Global Pensions