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Hi, I'm Scott Jarboe. I lead Mercer's US Defined Benefit Business. Over my 30-year career with Mercer, the companies have steadily transitioned from defined benefit to defined contribution plans as the primary retirement vehicle. So much so that today, less than 15% of large US corporations even offer a pension plan to new employees.
That said, well over half of large companies still have DB obligations on their balance sheet. So the question is, what's the next step? And that question has become quite a bit more urgent recently as interest rates are up over 150 basis points so far in 2022, and funded status for most plans has improved steadily since the global financial crisis, and the positive market experience of 2021. And rising rates recently have generally led to more favorable funded status even with equities down.
So while pension financial health has mostly improved, the burdens on plan sponsors haven't necessarily eased. Plan sponsors are looking at whether it's time to more aggressively de-risk the plan with liability hedging investments and pension risk transfer to shrink the balance sheet exposure, or move to terminate the pension plan altogether and remove all of the risk.
We've already seen many plan sponsors taking aggressive de-risking steps, lump sum windows, de-risking glide paths, annuity buyout transactions with insurers. They've all been popular options with sponsors and we expect that will continue. With annuity buyouts, for example, we've seen transaction volume increase every single year since the largest ever single transaction, GM's $29 billion mega deal.
Well, in 2021, that volume was surpassed. And despite pandemic-related business challenges and disruptions, the insurer marketplace has remained hungry and pricing has remained competitive. And the dedicated servicing of current and new policyholders has been uninterrupted.
On top of that, our most recent CFO survey suggested that around 70% of financial executives are considering terminating their pension plan within the next 10 years. So whether related to financial risk from market uncertainty or just general pension fatigue from leadership and staff, maybe both, it feels like we may be at a point of inflection. It's difficult to know what each DB plan sponsor will do in response. Certainly, many are becoming more active with de-risking strategies without moving to plan termination.
And while I do think that the majority of plan sponsors won't move to terminate their plans in the next few years, I would expect that we will see a significant increase in the volume of termination activity, even double the current volume for example. And just for scale, even if planned termination volume were to double, that would still be low single digit percentage of dB plans.
Terminating a DB plan is a complex endeavor, but we do expect this is the desired destination for many and we have again seen an increase in volume. Sponsors are looking at financial readiness, as well as data and legal readiness to prepare. Many need to augment their team with pension experts on a short term basis to help formulate and implement a dynamic termination solution.
Our pension clients may gain significant value by leveraging Mercer's financial strategy group. This group offers a dedicated experience with risk strategy, as well as execution of risk transfer strategies like investment hedging, targeted pension risk transfer, or full termination. Whatever the case, plan sponsors will need to have the firepower to deliver favorable outcomes and service excellence when settling their obligations and managing the various stakeholders, most importantly of which are the plan participants.
Clients working in this area may benefit from Mercer's experience with over 400 successful plan terminations over the past decade. We do expect a significant portion of the DB marketplace to continue to maintain their pensions over the long term and focus primarily on investment strategy and managing costs and risks.
That said, the wave of pension activity focused on de-risking towards termination is coming and here to stay. We believe DB plan sponsors who engage a service provider early to help them consider the costs and benefits of different strategy options will benefit from having the clarity on the destination, which will ultimately help them be more nimble to move with speed.
Furthermore, with clarity, they can leverage additional resources to help with execution, potentially allowing them to spend less time worrying about the retirement plan and more time on running the business. And the one thing I'm enormously proud of is that whatever direction the DB plan journey takes you, Mercer's here to help. Thank you.
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