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Closing the DB Funding Gap

Corporate boards and senior management are continuing to have heightened focus on financial risk of their DB Plans, according to a survey conducted by the CFO Research and Prudential Financial. Risk assessment strategies, such as modeling future outcomes based on changing actuarial and market variables, are helping plan sponsors better understand this risk and reevaluate their strategic framework. More than half (62%) have modeled future contributions under increased mortality assumptions, and nearly half (49%) have stress-tested their contribution policy under assumptions of market uncertainty and extreme volatility. These types of forward looking projections are helping plan sponsors on their quest to improve their funded ratios. In fact, 64% of large corporate plans have already increased contributions or are likely to do so in the next two years.