That was the finding of a research report by Fitch Ratings about the current state of US defined benefit plans.
The situation in many companies rises to the level of a “pension crisis” that could challenge their liquidity, Fitch said.
The resulting problems, according to Fitch are:
- substantial increases in pension expense or substantial pension income decrease
- significant charges to comprehensive income from changes in a plan’s funded status
- increasing requirements for cash contributions to a plan.
The new report also highlights that although it is
difficult for anyone outside of the company to determine
pension-related cash needs, investors have some tools to
assess future pension requirements.