Pension funds of Coca Cola and Pepsi

Many large corporations offer different pension programs as an income source for employees during their retirement years. The Coca Cola and Pepsi companies are two international competitors that have several products with different pension plans. These two companies are the most popular beverage brands in the nation and even their pension plans are comparatively different. It is highly important to properly administer these plans especially with the events that occur in the corporate finance world executives have to pay close attention to the funding of corporate pension plans and mostly offer those plans where the employer and employer make contributions on a regular basis. The executive officers of Coca Cola do not take this approach instead they prefer the cash balance plans option of defined benefit plans. Even though it is similar to the defined contribution plan, it is a defined benefit plan for legal purposes. On the other hand, Pepsi has voluntary defined benefit pension plans for their full time U.S. employees and some international employees as well. These plans are non-contributory since the employer is the only contributor funding the plan. Both companies focus on offering pension programs that will benefit the employee and also keep the company’s financial stability. When taking a look at the 2009 report for Coca Cola I see the operating revenue reported was $31.9 billion where in 2008 it was slightly lower at $28.9 billion. The cash balance plans offers risk free and secure benefits to employees which is highly important to the company as stated Sue Flemming, the director of global benefits at Coca Cola. The executives of the company plan out the design in efforts to increase mobility of the work force since the benefits are based on career average pay versus waiting several years to get those same benefits. Therefore, employers have the ability to set up the cash flow system without any worries of facing any legal issues regarding pension