Mercer’s innovative tools, solutions, and expertise on pension assets and liabilities help manage and reduce defined benefit plan risk.
MANAGING DEFINED BENEFIT PLAN RISK IS CRITICAL FOR TODAY’S ORGANIZATIONS
Market volatility, changes to inflation and interest rates, and rising longevity are just some of the factors that create financial risk in defined benefit plans. If not managed, defined benefit plan risk will impact credit ratings, access to capital, share prices, and plans for growth, as well as divert attention and valuable resources from core business strategy to pension issues.
Many defined benefit plan sponsors have closed plans to new entrants or frozen retirement benefits for all participants. However, these measures do not eliminate defined benefit plan risk. Substantial existing retirement benefit obligations and investment strategies may still leave the company exposed. Defined benefit plan fiduciaries can also be left with significant exposure to the sponsor covenant and market risk, while members may face reduced retirement benefits.
Our whitepaper explores the options available for taking advantage of pension funded status improvements, while mitigating the potential headwinds on the horizon.