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.

Based on our experience with pension plan terminations, the corporate defined benefit industry has a systemic problem: the funding level estimates given by many service providers are simply inaccurate. In cases we have reviewed, plan sponsors are being told that their termination basis funding levels are significantly lower than they actually are. Said another way, many plan sponsors are much closer to being able to fully settle their plan liabilities than they are being told.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

Your access to unlimited content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and events.
  • Access to other award-winning ALM websites including and

Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join now!

  • Unlimited access to - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including and
  • Exclusive discounts on and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2023 ALM Global, LLC. All Rights Reserved.