2025 Global Pension Risk Survey – U.S. Results

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2025 Global Pension Risk Survey – U.S. Findings

2025 Global Pension Risk Survey – U.S. Findings

How U.S. plan sponsors are reexamining pension risk in a well-funded world

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For decades, many predicted the end of U.S. private sector pension plans. Instead, they are evolving. The 2025 U.S. findings of Aon’s Global Pension Risk Survey explore how plan sponsors are managing risk in an environment where most plans are now near or over 100% funded—and where many intend to keep their plans in place for years to come.
Key Takeaways
  1. Most plans are here to stay – and are choosing a path

    2. Despite record funded levels, 68% of respondents report a long-term objective other than plan termination. Sponsors are deciding between two distinct strategies:

    • Hibernate: Maintain the plan at a low to moderate level of risk, often with continued settlement transactions such as lump sum windows and retiree annuity lift outs.
    • Terminate: Fully transfer liabilities over time.

    Each path requires a different approach to risk management, investment strategy, and governance.

     
  2. Pensions are smaller – and less threatening – than a decade ago

    3. U.S. corporations have significantly reduced the size of their pension obligations since 2012. At year end 2012, the average S&P 500 plan sponsor’s global Projected Benefit Obligation (PBO) was about 28% of market cap, with a deficit of 11% of market cap. By year end 2024, those figures had fallen to 10% and 0% respectively. For many sponsors, pensions are no longer the existential balance sheet risk they were after the Global Financial Crisis.

  3. Derisking continues, but surplus is changing behaviors

    4. Most ongoing plans are still on a path to derisk by reducing equity exposure and increasing liability-hedging assets. Yet, an emerging segment of sponsors in surplus is considering taking on a moderate level of investment risk to increase that surplus.

    Plan sponsors are also in the early stages of examining how to monetize surplus.

  4. OCIO and outsourced solutions are gaining momentum

    5. As plans mature and become more complex to manage, many sponsors are turning to Outsourced Chief Investment Officer (OCIO) solutions. OCIO mandates are increasingly used both for “hibernating” plans and those preparing for termination, offering stronger governance, more customized liability driven investment strategies, and the ability to manage the “last mile” of plan termination more effectively. Similar outsourcing trends are emerging in defined contribution through both traditional plan structures and Pooled Employer Plans (PEPs).

    Aon’s Global Pension Risk Survey 2025 – U.S. Findings provides the data, insights and practical strategies plan sponsors need to navigate a well-funded, increasingly bifurcated pension landscape—helping organizations make clearer choices between hibernation and termination, and align investment, risk and governance decisions with their long-term objectives. Download the full report to explore the findings and implications for your plan.

  • 68%

    of U.S. respondents report a long-term objective other than plan termination, indicating most plans are expected to remain in place for many years.

  • 11→0%

    the average deficit for large plan sponsors’ global pension plans fell from 11% to 0% of market cap between year‑end 2012 and year‑end 2024, alongside a 28→10% decline in PBO as a share of market cap.

  • 32%

    drop in total S&P 500 Projected Benefit Obligations over the past decade compared to a 16% decline in total pension assets over the same period.

Navigating the Last Mile: Investment Strategies for the 24 Months Before Pension Plan Termination

Navigating the Last Mile: Investment Strategies for the 24 Months Before Pension Plan Termination

 The last 24 months before pension plan termination are often the most complex—and the most consequential. Learn how to navigate this “last mile” by understanding shifting liabilities, actively managing risk through targeted investment strategies, and leveraging expert support in the annuity provider and bid process. Discover how plan sponsors can reduce surprises, control costs, and complete termination with greater confidence.

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