Defined Benefit Archives - Pension Policy International

13OctOctober 13, 2026

US. Interest Rates Boost Pension Funding in September

The funded status of the 100 largest corporate defined benefit plans in the U.S. rose to 114.5% in September, up from 112.2% in August, according to Milliman Inc.’s Pension Funding Index. A 47-basis-point increase in benchmark corporate bond interest rates during the month to 6.47% resulted in a $54 billion reduction in pension liabilities, helping to offset a negative 2.21% investment return. Discount rates have increased by more than 100 bps over the past year and have reached levels not...

October 13, 2026

NewsDefined Benefit, Funding, Interest Rates, US

06OctOctober 6, 2026

UK. DB schemes divided on endgame strategy amid improved funding

Defined benefit (DB) pension schemes are increasingly pursuing different endgame strategies as funding levels improve, according to research from the Pensions Management Institute (PMI) and Schroders. The study revealed that while 45 per cent of schemes were targeting a buy-in or buyout within the next decade, a third expected to run on indefinitely, 18 per cent planned a limited period of run-on before moving to insurance, and 5 per cent selected a consolidator route. The PMI and Schroders UK Pension Scheme...

October 6, 2026

NewsDefined Benefit, Funding, UK

14SepSeptember 14, 2026

US. Why Pensions Still Provide Key Income for Many Retirees Even as Access Declines

Traditional pensions, where employers guarantee their workers a fixed monthly paycheck for life in retirement based on their salary and years of service, are widely considered a thing of the past. But the reality is more complicated. While these highly sought-after defined benefit (DB) plans are no longer an option for most of today's workers, for retirees, they remain a common source of income. Pensions Are Much Less Common for Workers Today Only 29% of American workers have an employer-sponsored DB pension,...

September 14, 2026

NewsDefined Benefit, Social Security, US

28AugAugust 28, 2026

Risk Sharing and Asset Pricing under Alternative Retirement Systems

By Li Wei We examine what happens to financial markets and how generations share risk when defined benefit (DB) pension plans are incorporated into an asset pricing model with imperfect markets. We look at how important it is for pension fund growth, changes in asset demand, and return-driven volatility channels to use an adjusted macroeconomic asset price model and past data on financial markets and the pension sector. We use scenario models to look at what would happen to the...

August 28, 2026

Articles, Pension design2026, Defined Benefit, Defined Contribution, Risk

21AugAugust 21, 2026

Lessons for Retirement Security from Well-Regulated Pensions

By Andrew G. Biggs The near disappearance of traditional defined benefit pensions is often treated as a loss for retirement security. This paper asks a different question: whether workers and employers value guaranteed pension benefits enough to bear their full economic cost. ERISA made private pensions more secure but also more expensive, after which traditional plans declined sharply. Meanwhile, workers with defined contribution accounts generally do not recreate DB features through higher saving, conservative portfolios, or annuitization. These patterns do...

August 21, 2026

Articles, Pension design2026, Defined Benefit, Investment, Retirement Planning, Risk, US

11AugAugust 11, 2026

UK. DB scheme surplus rises to £271.3bn; funding ratio hits three-year high

The aggregate surplus of defined benefit (DB) schemes in the UK increased by £7.3bn during July to £271.3bn, as falling liabilities outweighed a decline in asset values, the latest figures from the Pension Protection Fund (PPF) have shown. The PPF’s 7800 Index showed that the aggregate funding ratio rose by 1.9 percentage points from 131.1 per cent in June to 133 per cent, the highest level recorded since July 2023. Total scheme assets fell by 1.7 per cent during the month, from £1.113trn...

August 11, 2026

NewsDefined Benefit, Funding, UK

26JunJune 26, 2026

UK. Health improvements could affect DB liabilities, trustees advised

The majority of defined benefit (DB) pension scheme trustees have not yet been able to factor in how breakthrough health treatments could affect liabilities, despite their potential to reshape future mortality trends, according to Standard Life. The insurer’s analysis, published this week, found 88% of DB trustees have not yet assessed the impact of this uncertainty on scheme liabilities. With 75% of DB schemes in surplus on a low-dependence basis, these positions may come under pressure if mortality improves faster than...

June 26, 2026

NewsDefined Benefit, Longevity, UK

22MayMay 22, 2026

Investment Decisions of Defined Benefit Pension Plans

By Zhichuan Frank Li, Jun Wang & Yuqi Zhang This paper examines the determinants of defined benefit (DB) pension plan investment decisions of U.S. corporations with the largest 100 DB plans (Milliman 100 companies). We test two contradicting theories on DB plans. The risk-management theory indicates that firms tend to reduce risk in their pension investments when facing high risk, and the risk-shifting theory predicts the opposite because the funds’ downside risk is hedged by federal government insurance. We find...

May 22, 2026

Articles, Investment, System Sustainability2024, Defined Benefit, Funding, Investment, Risk, US

20MarMarch 20, 2026

Employee Satisfaction and Pension Shortfall Risk

By Annita Florou, Meng Li, Peter F. Pope & Nipat Puangjampa Defined benefit (DB) pension plans are important to employee welfare. However, they carry risk as they are subject to minimum funding requirements. We examine the effect of a relaxation in pension funding rules on employee satisfaction by exploiting the adoption of the Moving Ahead for Progress in the 21st Century Act (MAP-21). We find that employees of DB firms are less satisfied with their firms and their senior managers, after...

March 20, 2026

Articles, Pension design2026, Defined Benefit, Funding, Occupational Pensions, US

13MarMarch 13, 2026

Pension and Entrepreneurship: Evidence from Sweden’s Transition from Defined Benefit to Defined Contribution

By Ai Jun Hou, Di Cui, Mingfa Ding, Yikai Han & Xiaoyang Li Sweden's 1999 pension reform-which replaced a defined-benefit (DB) regime with a notional defined-contribution (DC) scheme-changed incentives in ways that affect employees' career choice over the life cycle. We use Swedish administrative data and a difference-indifferences approach to study the impact of this reform on entrepreneurship. We find that entrepreneurial entry increases more after the reform among cohorts with greater exposure to the new DC pension system. The...

March 13, 2026

Articles, Pension design2026, Defined Benefit, Defined Contribution, Sweden

October 2026

US. Interest Rates Boost Pension Funding in September

UK. DB schemes divided on endgame strategy amid improved funding

September 2026

August 2026

Risk Sharing and Asset Pricing under Alternative Retirement Systems

Lessons for Retirement Security from Well-Regulated Pensions

UK. DB scheme surplus rises to £271.3bn; funding ratio hits three-year high

June 2026

UK. Health improvements could affect DB liabilities, trustees advised

May 2026

Investment Decisions of Defined Benefit Pension Plans

March 2026

Employee Satisfaction and Pension Shortfall Risk

Pension and Entrepreneurship: Evidence from Sweden’s Transition from Defined Benefit to Defined Contribution