Challenges defined benefit plan sponsors face in 2023
2023 has been a year of market volatility, persistent inflation, bank failures and geopolitical tensions. These obstacles pose challenges for defined benefit (DB) plan sponsors.
Despite market turbulence, many DB plans in Canada are in a positive position, with many plans in surplus positions. The question then becomes: how can DB plan sponsors capitalize on a plan surplus, and how can they best protect that surplus if a recession occurs?
One plan sponsor could choose to apply its surplus to benefit improvements, such as pension increases, in light of the inflationary environment; another could retain its surplus as a safeguard against uncertainty.
The reality is that uncertainty around inflation and interest rates may persist for some time. Amid market volatility, it falls to plan sponsors to solidify their plan’s standing for the long term – strategically and effectively.
Uncovering opportunities amid market uncertainty
It’s essential to be strategic during turbulent times, so opportunities are not missed in the noise.The financial well-being of plan members should always be top of mind when determining the course of action for your surplus.
Watch our latest video where we explore potential strategies you can take to ensure your DB plan is on solid ground.
Focus on results, not paperwork
For thousands of these DB pensions, we provide valuable insights, trusted consulting advice and practical support at every stage of the journey. Our global scale and extensive resources can help support you in any scenario, while providing customized insight, guidance and support tailored to your plan’s needs.
Legislative changes and evolving governance requirements have resulted in DB plan sponsors spending more time on plan administration.
Good governance is essential to the success of any DB pension plan. However, plan sponsors may find themselves without the resources needed to identify and act upon the opportunities that arise from market volatility.
This is where we come in. Access to external expertise and resources can help alleviate the administrative burden of pension plans. Whether your plan is open or closed, accruing or frozen, we can help you alleviate resource constraints, administer plan complexities and manage compliance risks.
Our support ranges from co-sourced to fully outsourced – and include temporary assistance during times of critical business or staff change.