Kelley Drye's Securities and Capital Markets
Practice Group has prepared a client advisory which highlights the impact that the current worldwide economic crisis is having on the funding status of defined benefit pension plans. As a result of the recent decline in the stock market and the economy in general, the funding status of most defined benefit pension plans is suffering; plan sponsors need to prepare for the consequences of any funding shortfalls and focus on assessing plan risks, preparing for disclosure and taking action.
What This Means To You
The attached advisory highlights the impact that the current worldwide economic crisis is having on the funding status of defined benefit pension plans. Plan sponsors may already be learning about the financial impacts on the plans, but the consequences of a plan's funding decline cannot be fully assessed without considering compliance with new funding contribution rules and its impact on overall cash flow, SEC disclosure rules and corporate finance and accounting matters. The advisory also outlines some basic steps to follow and principles to keep in mind as companies prepare for the end of 2008 and contemplate addressing 2009 reporting and funding requirements.