By Freshia Gonzales
Source: Benefits and Pensions Monitor
A decade and a half after the global financial crisis (GFC), defined benefit (DB) schemes across the G7 are recording funding surpluses, marking a reversal from persistent deficits that weighed on plan sponsors and regulators.
The change is driven by the sharp rise in interest rates and bond yields since 2022, which increased discount rates and lowered the present value of liabilities.
Even as credit spreads sit near 10-year lows, absolute yields remain well above pre-pandemic levels, helping DB plans achieve stronger funding positions.
In the United Kingdom, the Pension Protection Fund’s 7800 index shows DB schemes reaching a surplus of 120 percent by May 2025, surpassing the 2007 peak.