The corporate pension de-risking market has hit the brakes after a record-breaking run. More than $14 billion in pension risk transfers were executed YTD through Q3 2024—the highest level in over 16 years. Yet YTD Q2 2025, volume had dropped 64% year-over-year.
What’s driving this sharp reversal? Increasingly, it appears that corporate plan sponsors are behaving like bond traders—actively timing their de-risking strategies around rate moves and market conditions.
Pension liabilities are highly sensitive to long-term interest rates. When rates rise, the present value of those liabilities falls, making it less expensive for companies to transfer them off their balance sheets. Many sponsors now expect the 10-year Treasury yield—and the AA corporate bond rates used to discount liabilities—to continue rising. That view is shaped by factors like persistent inflation, ongoing fiscal stimulus, and geopolitical instability. The logic is simple: if liabilities will be worth less in the near future, why rush to transfer them today?
Legal Scrutiny
Layer on increasing legal scrutiny, and the “wait-and-see” approach becomes even more understandable.
Two sets of high-profile litigation have added risk to an already complex environment—cases involving General Electric and Weyerhaeuser in transactions with Athene, and Verizon in a transfer to Prudential and RGA.
- General Electric and Weyerhaeuser both executed pension risk transfers with Athene, a major annuity provider owned by Apollo Global Management (see table below for details). Athene is now at the center of multiple lawsuits filed by retirees who argue that its complex reinsurance structure and private equity backing fail to meet ERISA’s “safest available annuity” standard.
- Verizon, meanwhile, transferred roughly $5.9 billion in obligations to Prudential and RGA in March 2024. A class-action suit filed in December 2024 alleges that Verizon and its adviser, State Street Global Advisors, selected annuity providers based on price rather than safety—removing PBGC protection and breaching fiduciary duty under ERISA. Prudential is not named as a defendant. The case remains pending as of Q3 2025.
Together, these lawsuits have cast a chill over the previously booming risk transfer market. So are plan sponsors simply acting as prudent fiduciaries—or are they trading their way to a better deal? The answer may be both, but the behavior strongly resembles bond market strategy.
De-Risking Decisions
Today’s de-risking decisions appear driven less by internal actuarial triggers and more by macroeconomic forecasts, credit spreads, and expectations around forward yield curves. If a plan sponsor believes AA credit spreads will widen—due to, say, a business cycle slowdown or credit market stress—they have reason to delay. A wider spread raises the discount rate, which reduces the liability on paper and makes a transfer cheaper.
But this approach isn’t without critics. A recent piece in Benefits & Pensions Monitor cautioned that trying to time the de-risking market is a “big mistake.” Experts argue that pension de-risking should be approached as a long-term strategic journey—not a tactical market call.
Still, actual sponsor behavior suggests otherwise. Improved funded status, fueled by recent years of strong equity returns, can provide a buffer while they wait. Indeed, according to a recent Pensions & Investments survey with MetLife, 90% of plan sponsors now say pension risk is a top balance sheet priority, with increasing C-suite involvement.
This trend is expanding beyond pensions. Many sponsors are also evaluating de-risking strategies for retiree life and medical obligations. While smaller in size, these liabilities also respond to interest rates and offer administrative and tax advantages when transferred.
Strategic Pause
Taken together, the legal, financial, and operational pressures on corporate sponsors are creating a more deliberate, more tactical market. Sponsors are targeting specific retiree cohorts, modeling rate scenarios, and waiting for optimal pricing. With over $3 trillion in corporate DB assets still outstanding, the opportunity set remains vast.
For now, 2025 appears to be a year of strategic pause. Waiting may not always align with strict fiduciary best practices—but it reflects a bond trader’s mindset: watch the rates, monitor the spreads, and enter when conditions are right.
Corporate plan de-risking isn’t disappearing. It’s just being traded more carefully.
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