US. Why Corporate Pensions Are Acting Like Bond Traders
The corporate pension de-risking market has hit the brakes after a record-breaking run. More than $14 billion in pension risk transfers were executed YTD through Q3 2024—the highest level in over 16 years. Yet YTD Q2 2025, volume had dropped 64% year-over-year.
What’s driving this sharp reversal? Increasingly, it appears that corporate plan sponsors are behaving like bond traders—actively timing their de-risking strategies around rate moves and market conditions.
Pension liabilities are highly sensitive to long-term interest rates. When rates rise, the present value of those liabilities falls, making it less expensive for companies to transfer them off their balance sheets. Many sponsors now expect the 10-year Treasury yield—and the AA corporate bond rates used to discount liabilities—to continue rising. That view is shaped by factors like persistent inflation, ongoing fiscal stimulus, and geopolitical instability. The logic is simple: if liabilities will be worth less in the near future, why rush to transfer them today?
Read More: Forbes
