De-Risking Effectively Using Fixed-Income Building Blocks

With rates still elevated, volatility still near historical lows and US equities posting record highs, corporate defined benefit (DB) plans’ funding ratios remain solid. DB funding status reached 104.9% as of February 29, 2024, up about 3% versus a year prior. As a result, pension plans continue to seek to efficiently de-risk and increase allocation to fixed income. However, it is important that de-risking is performed thoughtfully to achieve each plan’s goals.