Disclaimer: The views expressed here are mine and may change without notice. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing. Please see important disclaimers here and here.
Defined Benefit plans are things of the past for most
people. But, not for investors. Roughly 20 companies in Dow 30 and more than
300 companies in S&P 500 indices still have such plans. Thus, these
companies need to record pension expenses in financial statements. A company’s
management uses various assumptions in calculating pension expense. What is the
impact of these assumptions on the company's profits? Can these assumptions tell
something about management? Let's look here.
