Recent history has not been kind to pension plans. The good news for employees who benefit from pensions is that after “a record number of plan terminations in recent years,” half of CFOs said they want to retool plans rather than eliminate them, according to a new survey from consulting firm Mercer.
The organizations that planned to terminate their employee pension plans have done so, and the remaining ones are now figuring out how to make the numbers work, Mercer concluded.
To be sure, changes are still on the horizon. More than half of the 173 finance execs Mercer surveyed said they plan to make changes to pension plan designs this year. Considerations include hybrid structures and flexible arrangements like cash balance plans.
According to Mercer, this “signals a move towards more adaptable pension solutions” that both meet workers’ needs and maintain tolerable levels of organizational risks. A significant number of employees aren’t confident they’ll be able to solely live off their retirement savings, according to Scott Jarboe, US definition benefit segment leader at Mercer.
“This data shows many CFOs are not retreating from pensions—and that there’s a growing interest in creative plan design and adaptable pension solutions that cater to the diverse needs of the modern workforce, while keeping the risks for the organization at an acceptable level,” Jarboe said in a statement.
CFOs shared key strategies they look for in adapting their plans. One is risk transfer. More than seven in 10 respondents said their organizations will offer lump-sum payments in the next two years, and additionally, more than three in five organizations have transferred or are contemplating “transferring retiree obligations to insurers through annuity purchases,” Mercer found.
Survey respondents also said they'd changed defined benefit plan governance. Seven in 10 said they “adopted de-risking strategies” in 2025, a nearly 10% uptick from two years ago. Around 44% said they’ve moved more assets to fixed-income investments “to enhance pension funded status stability.”
More than half the respondents said it was difficult to make needed changes promptly. “In response, many are leaning into data-driven tools, such as dashboards and analytics, to guide decision-making and drive efficiency,” Mercer noted.
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