GLOBAL - Nearly a quarter of Continental European companies believe their pension plans represent a serious risk to the organisation, a survey by Mercer has found.

The study also found that UK firms are most concerned about their pension plans: 29% believe the risk is serious as compared 24% in Continental Europe.

"Globally, companies are waking up to the fact they need to manage pension plan funding in the overall context of their corporate finances, rather than as a separate entity," Bob Moreen, worldwide partner at Mercer in the US commented.

According to the firm, greater concern among UK companies is to some extent "unsurprising", as the average pension exposure is twice that in the US: "gross pension liabilities for FTSE100 companies is 28% of market capitalisation, compared to an equivalent figure of 15% for S&P500 companies," the firm said.

Also, the survey among 312 organisations worldwide, nearly half of which employ more than 10.000 people, showed 60% of Continental European companies have decided to close their defined benefit plan to new employees.

Furthermore, 26% of firms intend to hedge interest rate risk through fixed income investments or derivates, and 40% of respondents do not know how analysts assess the financial effects of their pension plans.

Elsewhere, Lane Clark & Peacock (LCP) has launched its trustee governance practice to help pension trustees operate effectively, manage risk and meet their scheme governance obligations.

"Governance is critical for the operation of a pension scheme and risk management is an important part of this,"  the firm said.

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