Pensions and corporate financial performance: intricately linked
- Document type
- Corporate author(s)
- Towers Watson
- Towers Watson
- Date of publication
- 6 July 2010
- Trends: economic, social and technology trends affecting business, People management: all aspects of managing people
- Business and management
- Material type
This is the second and concluding instalment of Towers Watson's guide to managing the financial performance of defined benefit (DB). The guide explores the following policy areas and the connections among them:
- A company's benefit policy governs the design and the size of the allocation of total compensation to retirement plans.
- The funding policy determines how much a company contributes to its pension plans and the plans’ targeted funded levels.
- Investment policy guides long-term strategic and short-term tactical decisions concerning how accumulated pension plan assets are to be invested.
- The accounting policy governs how and when the cost of the pension plan will be recognized in company accounts.
The guide includes observations concerning the influence of changes in the regulatory and capital market environments on retirement financial management practices. It also provides some suggestions for improved plan financial performance.
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