Accountant RSM Robson Rhodes surveyed 18 leading quoted construction firms and found that only Costain had adopted it.
The rule, which is known as FRS17, is due to come into force on 1 January 2005. It is thought by regulators to give greater accounting transparency to pension risks as it forces a company to write down any pension deficit on its balance sheet as a liability, thereby reducing the value of the company. Previously it was not put on the balance sheet.
This could wipe 30% or 40% off the value of contractors with particularly large deficits and few assets – although RSM Robson Rhodes said it is likely to average out at 7%.
Contractors are particularly at risk because of the prevalence in the sector of final salary schemes, which place risk on the employer rather than the employee. Many of these schemes have been closed to new entrants.
Glyn Williams, head of property and construction at RSM Robson Rhodes, said: "The trouble with the final salary schemes is that the investment performance has been very poor, so a lot of schemes that were in surplus are now in deficit. As a result, contractors have had to increase their pension contributions."
These deficits can be made up over a long period, typically 10 to 15 years, but any increase in payment is hard on contractors as their profit margin – typically 1-2% – is so small.
Some believe that the deficit in the final salary schemes will move back to surplus once investment records and the performance of the stock market have improved.
But Williams warned: "Clearance of these deficits may well have a significant effect on the future cash flows of these businesses. It is clear that management needs to start considering the implications now."