By John S. McClenahen Large and midsized companies are facing major increases in pension expenses this year to make up for recent losses in their pension plans, says Deloitte & Touche LLP. The increases could undercut corporate earnings growth and slow U.S. recovery from the 2001 recession, claims the professional services firm. Some 40% of the companies responding to the survey of 80 firms say their pension expenses will rise by more than 50% in 2003. Another 20% forecast increases of 26% to 50%, and 16% of the respondents foresee expenses rising between 11% and 25%. Some 12% of the companies responding have already decided on changes to their plans and 31% are looking at such alternatives as cash-balance or profit-sharing plans. However, "companies that change their pension plans solely because of stock-market volatility and the current higher expenses could be making a serious mistake," warns David Hilko, practice leader of the employee benefits group in Deloitte & Touche's Chicago office. "Changes now won't fix the funding issue," he states. "The companies still must make up these major shortfalls under [Internal Revenue Service] rules," he emphasizes. "What's more, benefit expenses often rise in the short term when companies switch plans, which would simply add to the current expense crisis."