How much funding for your company's pension plan?

The article discusses various issues that should be considered by companies in the U.S. while managing their pension plans to make them a lucrative investment opportunity. Since the earnings on money in the pension fund are not subject to tax, companies stand a chance to earn a tax-free rate of return from their pension funds. Companies should consider balancing the tax benefits against some negative factors including the impact of funding on corporate liquidity, and inflation. Sponsors should also exercise caution in funding beyond their legal obligation. It is also important that the company takes care while handling accompanying accounting and disclosure decisions. Companies should also remember not to match an advance funding with an ill-conceived investment policy.