January 2024 | The average funded ratio for the top 200 U.S. corporate pension plans is at the highest level in 15 years. As a result, we encourage sponsors to consider reopening plans or increasing benefits.
A golden opportunity for plan sponsors
The Projected Benefit Obligation (PBO) funded ratios of U.S. corporate pension plans hit a 15-year high of 105% in 2023, according to the BlackRock U.S. LDI Pension MarketWatch. As a result, we encourage overfunded plans to consider reopening or increasing benefits.
In our sixth annual Corporate Pensions Themes paper, we discuss the investment implications of reopening plans, as well as our other key themes for 2024: the return of compulsory contributions for some plans, the implications of higher rates and an inverted yield curve on LDI programs, and the role of private markets for well-funded plans.
In the video below, Martin Jaugietis, Co-Head Americas Pensions OCIO, discusses these themes and what they mean for corporate plans.
The corporate pension DB plan may not be dead after all!
Angela Zhang, CFA, CAIADirector, Client Insight Unit
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