Issue Date: February 9, 2009
ACS Prepares For Economic Challenges
IT SHOULD COME as no surprise that the American Chemical Society, like many organizations, faces a challenging economic climate. On the positive side, the financial results from the society's core operations remain strong. Both Chemical Abstracts Service and the Publications Division turned in favorable financial performances in 2008 and project modest growth in 2009. However, the society's financial position has been weakened by the historic downturn in the capital markets.
Even though ACS investments are conservatively managed, the extraordinary market turmoil in 2008 led to substantial investment losses, large reductions in reserves, and a decline in the funded status of the society's Defined Benefit Pension Plan. This is a challenging situation, but it is not unique to ACS. Even so, to protect the society from additional, foreseeable serious financial consequences, both in the short term and over the long haul, the board reluctantly took action in December to modify the Postretirement Benefit Plans for ACS employees.
This decision was not taken lightly. The board highly values the dedicated and professional ACS staff, and we are assured that the revised benefit package being offered to ACS employees remains solid and highly competitive with other organizations. This was a very difficult decision, but it was viewed as an essential measure that will help ensure financial sustainability of the organization, which in the long run is in the best interests of both ACS employees and members.
In 2006, the society had the foresight to develop a robust Contingency Plan that contemplated potential threats from many different sources, their probability of occurrence, their duration, and their likely financial impact. The plan covers all operating and administrative units as well as member programs. The plan was prepared through a deliberate, thoughtful, and iterative process that involved the ACS Board, the Society Committee on Budget & Finance, and ACS management. It's worth noting that the events that led up to the extraordinary escalation in Postretirement Benefit Plan costs were contemplated in the 2006 Contingency Plan, and the board's action in December was drawn directly from the mitigation strategy section of that plan. Although the board couldn't have anticipated the situation we face today, the fact that such a fully developed Contingency Plan is available has been helpful and reassuring.
The society is currently updating the Contingency Plan to capture new information and reflect what we've learned over the past two years. In addition to identifying new and emerging threats, ACS management is also updating the mitigation strategies to respond to the threats and to ensure the society's long-term financial sustainability. The updated plan will be reviewed by the ACS Board at the upcoming ACS national meeting in Salt Lake City.
The ACS Board of Directors approaches 2009 with cautious optimism but also with an understanding that a deep and prolonged recession may require more difficult decisions down the road. Fortunately, the society remains on sound financial footing and has a solid strategic plan to help rebuild our reserves and guide us through these challenging times. With the approval of the ACS Board, senior management is implementing a wide variety of actions to control costs and deliver our most valued products and services with no reduction in quality. These actions, in conjunction with the dedicated efforts of our many volunteer members, will enable ACS to continue serving its members and the scientific community in 2009 and beyond.
- Chemical & Engineering News
- ISSN 0009-2347
- Copyright © American Chemical Society