The 100 largest corporate defined benefit plans in the United States ended August with 112.2% funded status and a $141 billion surplus, according to Milliman's Pension Funding Index. A year earlier the same plans stood at 104.3%. Twelve-month asset returns ran 8.06%, and the benchmark discount rate held at 6.00%, down two basis points from July.
Milliman's baseline projection has the surplus reaching $145 billion by year-end 2026 and $156 billion by the end of 2027.
If you have a benefit in one of these plans, here is the first thing to understand: that surplus is not a cushion sitting under your name.
A Surplus Does Not Raise Your Benefit
Your defined benefit pension is a formula — typically years of service times a percentage of final average pay, or a cash balance credit. The formula is written in the plan document. It does not index to how the plan's investments performed.
When assets exceed liabilities, the excess belongs to the plan, and decisions about it belong to the sponsor. A 112% funded ratio makes your promised check more secure. It does not make it larger.
The reverse is also worth knowing: a plan below 100% does not mean your benefit is at risk in any immediate sense. Frozen and underfunded plans alike remain insured by the Pension Benefit Guaranty Corporation, up to statutory limits.
What the Surplus Actually Changed
For a decade, the standard move for an overfunded frozen plan was a pension risk transfer — hand the obligation to an insurance company, and your monthly check starts arriving from an insurer rather than from your former employer. That matters, because once the annuity is purchased, PBGC coverage ends and you rely on state guaranty associations instead.
That pipeline has slowed. LIMRA reported roughly $3.8 billion in U.S. buyout and buy-in sales in the first quarter of 2026 — a 47% decline year over year. Part of that is timing, with deal flow having been pulled into late 2025. Part of it is litigation: a wave of lawsuits alleging that sponsors failed to select the safest available annuity has produced conflicting rulings and made sponsors cautious.
The Other Playbook: Reopening
The alternative use of a surplus is to reopen the frozen plan and pay new benefits out of existing assets instead of corporate cash.
IBM did exactly this. Research from the Center for Retirement Research at Boston College documents that IBM unfroze its cash balance plan in January 2024 to tap a $5 billion surplus, replacing its 5% 401(k) match and 1% automatic contribution with a 5% credit to a notional "Retirement Benefit Account" inside the pension. Employees received a 1% salary increase to partially offset the change. IBM's savings: roughly $500 million a year over a decade.
The CRR screened 45 large U.S. companies with DB obligations above $10 billion and found only a handful of plausible followers — Bank of America ($11.1 billion surplus) and JPMorgan Chase ($9.8 billion) as the strongest candidates, with Citigroup, Honeywell, and Deere also fitting the profile. Their conclusion on the maneuver: "a financial maneuver, not a meaningful change" in retirement income provision.
Practical Takeaways
- The Milliman 100 is an average, not your plan. Read your own Annual Funding Notice. Under 29 CFR § 2520.101-5, sponsors must furnish it within 120 days after the plan year ends — April 30 for a calendar-year plan. Small plans (100 or fewer participants) may deliver it as late as the Form 5500 deadline.
- If a buyout notice arrives, read who the insurer is. PBGC coverage ends at the annuity purchase. State guaranty association limits vary by state and are generally lower.
- If your employer swaps a 401(k) match for a pension credit, price the whole package. A notional account inside a pension is not portable the way a 401(k) balance is, and the crediting rate is set by plan terms, not the market.
- Do not read a surplus as a benefit increase. Ask HR whether any ad hoc increase has actually been adopted before assuming one.
- Surplus levels move with rates, not just returns. Much of this improvement came from higher discount rates shrinking liabilities. If long corporate yields fall, funded ratios compress.
Sources: Milliman 100 Pension Funding Index, September 2026 (data as of August 31, 2026); Milliman 100 Pension Funding Index, August 2026; LIMRA, U.S. Pension Risk Transfer Sales, First Quarter 2026; Center for Retirement Research at Boston College, "Why Did IBM Reopen Its Defined Benefit Plan? Will Others Follow?"; 29 CFR § 2520.101-5.