COVID-19 effect on defined benefit plans

Our new white paper covers the impact of COVID-19 on defined benefit plans in the Russell 3000 from information gleaned from Form 5500 filings.

Key Findings:

  • Current economic downturn and likely cut in stock dividends caused by the COVID-19 pandemic could lead to financial pressure on companies with under-funded defined-benefit plans.

  • Approximately 27% of companies in the Russell 3000 still have a defined-benefit pension plan.

  • Companies with a high target normal cost and a high concentration of active defined-benefit

  • plan participants will have additional liability in the form of future company contributions.

  • Companies in the air transportation and retail industries that are historically vulnerable to plan failures and low funding ratios have a more significant problem during the current market downurn with “at-risk” underfunded defined-benefit plans.