gears with pension funds (Photo: Shutterstock)

With the increase in interest rates leading to an improvement in funded status for the majority of frozen corporate defined benefit plans, these plans are ever closer to their goal of plan termination.   This path to termination calls for a coordination of contribution strategy, investment strategy and liability management.  However, if the plan termination funded status is not accurate it can lead to a multitude of issues such as taking excessive investment risk, over-funding the plan, or burdening the plan sponsor with additional administration expenses.

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