According to the Pension Benefit Guaranty Corporation (PBGC), there are more than 25,000 corporate pension plans in the United States.¹

For each of these plans, managers in the sponsoring company make decisions on a regular basis about how much and how frequently to contribute to the plan and what investment strategy to pursue with plan assets. Until recently, the most common approach to these decisions taken by plan sponsors could be loosely characterized as: Let's make contributions at the minimum level permitted by regulation, and let's use a growth-oriented investment approach, trusting that over time the combination of market returns and legislative smoothing will lead the plan to be fully funded at a reasonable—and reasonably stable—cost.