Pension Funding Remains An Uphill Climb For The U.S. Not-For-Profit Health Care Sector Apr 11
- ID: 1753980
- April 2011
- Region: United States
- Standard & Poors
Many not-for-profit hospitals and health systems continue to grapple with pension costs and will likely face increased pension funding needs in the next several years. Low discount rates -- the rate plan sponsors use to measure the benefit obligation -- have resulted in lower funding levels despite a rebound in asset values. While overall credit quality in the sector was stable in 2010 and should remain so this year, high pension contributions could crowd out other cash needs like capital projects and force more health systems to change their plan design. We believe that hospitals' desire to make pension plan changes in order to reduce costs is occurring within a broader context of revenue pressure and a broad-based review of...
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