Consulting firm Watson Wyatt has estimated that listed Australian companies' unfunded defined benefit superannuation liability has blown out to $25 billion as at 31 December 2008.
An update to a regular Watson Wyatt survey revealed that at 30 June 2008, the Australian listed companies in the study held $58 billion in defined benefit superannuation liability and backed that up with $56 billion in assets.
"There was a modest $2 billion shortfall just before the impact of the financial crisis but this materially worsened in the second half of 2008," Watson Wyatt principal David McNeice said.
The increase to $25 billion over the second six month period was driven by a combination of falling interest rates and falling value in financial assets, McNeice said.
"What happened in the second six months was unprecedented. All funded superannuation funds have had a torrid 15 months," he said.
However, the outlook going forward remained promising as sponsoring companies and trustees looked at ways to restore the position.
"Working together to implement an actuarial funding program that may involve additional contributions over a period of time and may also involve a rethink of the investment policy may restore the position," McNeice said.
"By international standards, the Australian position is actually relatively strong."
The Watson Wyatt study covers Australian Securities Exchange (ASX) listed companies only and does not survey unlisted companies or the public sector.
This update looked at 143 of the top 200 listed companies on the ASX, for whom reliable information was readily available.
