"In the pension endgame, targeting a significant surplus is a reasonable response to the economics of pension risk, and it acknowledges the real-world opportunities to capture value from that surplus."

Defined benefit (DB) plans are not simply a costly relic from an earlier age of retirement planning. Examined closely, traditional pensions reveal a capacity to deliver valuable retirement benefits to employees, along with tangible financial benefits to plan sponsors. Years ago, these notions were commonplace, but two decades of funding volatility and costly recapitalization efforts have erased plan sponsors’ collective memory of the value in maintaining a DB pension.

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