Canadian Chief Financial Officers are increasingly pessimistic about the pension system, according to a survey released Monday.

Preliminary survey findings from The Conference Board of Canada and Watson Wyatt Worldwide show the percentage of CFOs who believe that the pension underfunding crisis will persist has more than doubled since last year.

In the survey, 43% of CFOs said they believe problems are widespread and will probably continue beyond the next few years, an increase from 20% one year ago. Respondents who feel the problems are serious but largely cyclical decreased to 23% this year from 39% in 2004. Of the 77 CFOs who responded, 64 are in the private sector, representing 15% of Canadian private-sector pension assets.

“The views of sponsors of large pension plans about the duration of the problems in the pension system have shifted in the past year, toward a more pessimistic outlook,” Gilles Rhéaume, vice president, policy, business and society of the Conference Board, said in a release. “When we asked CFOs to identify the greatest challenges they face with respect their organization’s pension plans, their responses were largely the same as in last year’s survey. This indicates that these challenges linger and are of a systemic nature.”

Ian Markham, director, pension innovation, Watson Wyatt Canada, said solvency levels are moving in the right direction, but “the improvement is largely due to the extra contributions that many plan sponsors have been making toward their pension deficits. Furthermore, the beneficial impact on solvency levels by virtue of investment gains made in 2004 is being offset or wiped out altogether by lower bond yields and new pension actuarial standards recently introduced.”

Among other survey findings, respondents are more likely to identify major threats to defined benefit plans than defined contribution plans. CFOs identified the top three threats to DB plans as: the risks of major changes in future contribution levels (67%); the imbalance or “asymmetry” between plan funding risks and rewards (57 %); and the risks of large fluctuations in pension expenses affecting future corporate financial statements (53%).

These are followed by new requirements to distribute surpluses on partial wind-up plans following the Supreme Court of Canada’s controversial Monsanto decision in July 2004 (48%). In the area of regulatory reform, more than 64% of respondents said the adoption of a single pension standards regime for Canada would strengthen the system.