Mercer | Helping You Manage Your Financial Disclosures

Mercer | Helping You Manage Your Financial Disclosures

Helping you manage your financial disclosures

Recent low yields have placed increased focus on the disclosures companies must make relating to their defined benefit (DB) pension schemes. Discount rates fell over 2016 increasing scheme liabilities and, despite yields increasing in the fourth quarter, year-end discount rates were still at their lowest point ever.

DB pension scheme disclosures affect companies’ balance sheets and profit and loss (P&L) accounts, and can have a serious impact on:

  • Banking covenants
  • Borrowing costs
  • Earnings per share
  • Reported profits
  • Overall debt to equity ratio
  • Dividend payments       
  • Share price
  • Analyst views
  • Credit rating

What Can Be Done to Manage Pension Scheme Disclosures?

There are a number of ways to manage your pension scheme disclosures and their impact on financial disclosures. Although not all of these may apply to you, working through each option is still a useful exercise. Pension scheme disclosures can be managed in four broad areas:

  • Liability valuation assumptions
  • Liability risk management
  • De-risking
  • Benefit management


To find out more about these four areas, download our update "HELPING YOU MANAGE YOUR FINANCIAL DISCLOSURE"

 

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