Some CFOs managing defined benefit plans are choosing to maintain them after years of phaseouts, with some even exploring ways to bring them back.
June 12, 2025 - CFO
Adam Zaki, Reporter
After years of closing, freezing or offloading defined benefit pension plans, a growing number of finance leaders are rethinking their strategy, according to Mercer’s 2025 CFO survey.
Data shows half of plan sponsors now say they intend to keep their DB plans for the long term, a sharp reversal from just two years ago, when just 36% of finance leaders said DB plans were sticking around. Phenomena like higher funded status, new plan design options and ongoing labor market pressures are prompting CFOs to reassess the value of what some would call antiquated and risky retirement plans.
The survey reveals that finance executives are exploring a range of options, from reopening previously frozen plans to shifting toward hybrid designs that share investment risk with employees. At the same time, risk transfer activity remains strong, with seven in 10 (70%) of CFOs planning to offer lump-sum payouts in the next two years. Now that a majority of large pension plans are fully funded or better, this positive shift is enabling CFOs to explore different types of long-term pension strategies.
Data shows CFOs are taking a more active role in managing the risk side of pension plans. Seventy percent say they’ve adopted dynamic de-risking strategies to help stabilize funding levels. Another 44% have shifted more assets into fixed income, while 43% say they’ve reduced investment risk as their funded status improved.
The governance model is changing, too. Forty percent of organizations now rely on a full outsourced chief investment officer setup, up from 30% two years ago. With fewer than 40% of CFOs confident in their in-house pension expertise, many are simplifying oversight by bundling investment, actuarial and administrative services with fewer external partners.
On a recent webinar focused on this data, Neeraj Baxi, Mercer’s US defined benefit investments research director, said the shift toward outsourcing is largely driven by constraints on the capacity of finance teams to handle the work it takes to manage complex plans.
“Companies have limited resources, [and] in many cases, internal teams dedicated to DB plans have been shrinking, and they can really benefit from the support that outside experts bring to the table,” he said.
Baxi added that many sponsors are now bundling services across investments, administration and actuarial functions: “There’s a lot of benefit to consolidating... even using the same provider for all three services. It helps manage internal workloads and creates a more holistic view.”
While more CFOs are choosing to keep their DB plans, some are also considering reopening ones they previously closed or froze. Nearly six in 10 (58%) of plan sponsors with frozen or closed plans say they would consider reopening them, a number that surprised even Mercer’s consultants on the webinar.
The interest reflects a shift in how finance leaders are thinking about surplus use, workforce retention and long-term planning. Still, according to Mercer leaders, few companies have actually done it.
“The conversations are certainly very real,” said Valerie Dion, a partner and senior pension strategist at Mercer, during the webinar. “We’re getting a lot of questions and interest, but from an activity standpoint, I’ve seen very little at this point.”
She noted that some sponsors are looking at creative ways to use surplus, such as restarting DB accruals temporarily, offsetting 401(k) matching contributions or funding retiree medical benefits. But even those exploring such options are proceeding with caution. As Dion put it, “There’s more conversation than implementation right now.”
Mercer's 2025 CFO survey consists of responses from 173 CFOs and senior finance executives who actively manage pension plans.