Pensions Improved in 2021. Companies May Abandon Them in 2022

Large corporate pension plans significantly improved their financial footing in 2021, setting up the new year for more pension risk transfers and big companies exiting defined-benefit retirement plans altogether.

The aggregate pension funding status of 361 top Fortune 1000 companies improved to 96% last year, according to a new Willis Towers Watson PLC analysis. Funding status jumped eight percentage points over 2020 and crossed the 90% threshold for the first time since the 2007, before the Great Recession.

Traditional pension plans—which workers often prefer over 401(k)s because they guarantee a stable source of income later in life—have withered over the ...