By Jonathan Perry
Source: Georgetown University
Once a key employee benefit, corporate defined benefit (DB) plans have been on the decline over the past several decades. The U.S. has seen a dramatic transition from DB to defined contribution (DC) plans.
Over this time, active DB participation has declined from 26 million to 12 million, while active DC membership has grown from 36 million to 85 million. Today, only 15% of private sector workers have access to a DB plan and only 23% of workers who participate in a DB plan are in one that provides accruals to all members, meaning there are millions of workers with frozen DB benefits.
However, rising interest rates in 2022 reduced liabilities, improving funded status, and resulting in many plans now being at or above 100% funded status for the first time in years.