Painful

摘要

Life, not death, may be the final account-ing for Europe's harried executives. Next year, the way they tally assets and liabilities in their companies' pension plans is due to change when international accounting standards take effect for listed firms. The new rules will make it (a bit) harder to pretend that big deficits do not exist, and easier for investors to compare pension-financing across companies. Companies are bracing themselves. Already, defined-benefit pensions-in which employees are promised a certain amount upon retirement-are in big trouble. The stockmarket slump has hurt investment returns; meanwhile, retirees keep living longer and low interest rates have pushed up the present value of liabilities. British Airways' pension deficit is around 70% of its market capitalisation, with other worthies such as Rolls-Royce and BT not far behind, according to J.P. Morgan Chase (see chart).