Cows, Elephants and Pensions
In addition to a few days of productive meetings in London, I had the pleasure of seeing brightly colored elephant statues throughout the greater environs of the city. Apparently, these "for sale" collectibles are meant to draw attention to the plight of the Asian elephant. Click here to view some of the 250+ pachyderms on display through the end of June 2010. Several years ago, 3D bovines of all stripes and sizes were all the rage, appearing in New York, Tokyo, London and many other cities throughout the world. Grabbing the attention of tourists and neighbors alike, the Cow Parade was able to auction off the cows to benefit local charities.
After reading the scary projections in "Funded Status Takes a Beating" (Pension Thema, Deutsche Bank, June 2010), I wonder if we need some version of Piggybanks on Parade to accelerate the long overdue focus on financial pain in the boardroom. Authors John Haugh and Ken Akoundi project an "aggregate S&P 500 pension deficit of $325 billion" by mid year 2010 and an "aggregate funded status of 78%." Notwithstanding the economics associated with each benefit scheme and absent a pro-active risk management approach to stem further damage, funding problems can easily spell trouble for shareholders too. Topping off plans as mandated by law requires cash that could otherwise be diverted to positive net present value projects.
Who wants a porcine statue in their living room as a visible reminder that pensionland has issues that impact us all? Raise your hand.
