svosavvy

Pension Underfunding: The Next Earnings Shock?

thanks for the article author,

I would personally wonder in my most unprofessional lay mind how the credit freeze is impacting pension underfunding by companies. Just looking at alcoa their pension funding levels according to what I am reading are running at or about 2005 numbers while 2007 saw record funding so it appears as if 2008 has fallen off a cliff. I would wonder if underfunding isn't almost a legal way to rob peter to pay paul as a means of getting by during this credit period when even AAA firms get saddled with onerous terms not to mention BBB firms like alcoa. Yes it will need to be brought in at a later date, but, hopefully during a less hostile credit environment. Seems to me it might be a way to shore up balance sheets in the near term. I just mention alcoa because it is my favorite mutt at the pound these days.