A Rare Moment for Defined Benefit Plans: Why Now Is the Time to Act

Hospitals and healthcare sponsors of defined benefit (DB) plans face a unique window of opportunity. Current market conditions—marked by strong equity performance, high interest rates, and competitive annuity pricing—have significantly improved funded status for many plans. 
 
These factors create an ideal environment for sponsors to take strategic action, whether by terminating frozen plans, reducing volatility in ongoing plans, or optimizing enterprise risk. Healthcare organizations have an added advantage: the ability to manage pension assets alongside endowments, enabling a holistic approach to investment risk and return. Acting now can strengthen balance sheets and enhance long-term financial sustainability.
 
Key takeaways:
 
  • Historic equity gains and improved yield curves: Understand how these rare conditions create opportunities for DB plans not seen in years.  
  • Acting now matters: Learn why acting now can lock in gains, reduce volatility, and optimize funding before market dynamics shift.
  • Future-defining decisions: Choices made in the next 6–12 months could shape plan sustainability for the next decade.
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