Canadian companies pour cash into pensions

Date: Monday, April 26, 2004

According to The Globe and Mail, Canada's largest companies poured billions in additional cash into their corporate pension plans last year, an indication of the kind of hangover many firms are facing after a string of negative returns for retirement-fund investments. A Report on Business study of pension funding at companies included in the S&P/TSX index found that cash contributions to defined-benefit pension plans jumped by close to $2.4-billion last year to $5.4-billion. Some firms also are crunching the numbers and deciding to put extra money into their pension plans rather than using it for other business investments. It's a move that not only provides more security for employee retirement benefits, but also has tax advantages and can help a company's income statement in coming years. The article cites the head of Mercer Investment Consulting in Canada saying companies are investigating different strategies, such as the use of hedge funds, and reviewing their risk.
The article closes with an overview of the top 10 companies and their contributions to their pension fund. See Monday's G&M for the complete story.