Corporates forced to prop up ailing DB plans

Since government bond yields are used to discount future liabilities, a reduction in the discount rate from 6 per cent to 4 increases the reported liabilities by 28 per cent.

The Watson Wyatt survey analysed the accounts of 143 of the top 200 listed companies on the ASX. Of these, 54 companies continue to have a DB obligation while the remaining companies provide DC arrangements only.

It did not cover unlisted companies
(including subsidiaries of overseas businesses), or the public sector.

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