In part I, we looked at trends that are causing organizations to take a fresh look at DB plans. This is the second and final part of this series.
According to the Plan Sponsor 2025 Defined Benefit Administration Survey:
Technology modernization is accelerating. In the past two years, 73 percent of DB providers updated their participant websites, 60 percent upgraded plan sponsor portals, and 60 percent enhanced their core administration platforms. If you're working with a provider still running on legacy technology, you're likely spending more time on manual workarounds than strategic plan management.
Distribution patterns are shifting with interest rates. As rates rise and DB plan liabilities decrease, more organizations are initiating lump-sum windows for terminated, vested participants. In 2024, 42 percent of participants chose lump-sum payments while 58 percent opted for annuitized payments. Understanding these patterns helps you forecast cash flow, plan communications, and manage participant expectations.
Long-term relationships dominate, but that's changing. While 55 percent of DB plan sponsors have stayed with their provider for at least 20 years, the wave of technology upgrades and strategic reassessments is creating new evaluation cycles.
The future assets of your participants rely on your focus of embracing new ways to execute your collective vision.
The fundamentals remain clear, and Ani Chatmajian, Defined Benefit Solution Leader at TELUS Health, underscores them: DB plans place all investment risk and benefit liability on the employer, which is unlike defined contribution (DC) plans. You define the benefit formula, fund the plan at the aggregate level, and guarantee specific retirement income. This means your administration needs are fundamentally different—you're managing complex actuarial calculations, regulatory compliance, and participant communications that explain guaranteed benefits rather than account balances.
Many organizations currently sponsor DB plans. The new plans being established today are predominantly cash balance designs rather than traditional formulas—offering DB security with the portability and transparency today's workforce expects.
Whether you're managing a legacy DB plan, considering reopening a frozen plan, or exploring a new cash balance design, three factors drive success: provider technology that matches your operational reality, expertise in the specific DB scenarios you're navigating, and service delivery that scales as distribution patterns shift.
The defined benefit landscape isn't what it was in 1983—or even 2020. For benefits leaders willing to look beyond outdated assumptions, today's DB environment offers strategic opportunities that simply didn't exist a few years ago.
At TELUS Health, leaders like Ani Chatmajian—who brings 35 years of DB outsourcing experience—work closely with clients through systems development, implementation, and ongoing operational success. Ani combines her knowledge of DB plans and technology to offer the best tools to her clients. She strategically supports sales and product development, scoping projects and positioning holistic solutions for clients. Her years of experience span several organizations. Before joining TELUS Health, she served as DB Solution Leader at Mercer, Implementation Vice President at Fidelity Investments, Strategic Business Unit Director at ACS (now Conduent), Director/Program Manager at Mellon Financial Corporation and Partner at PricewaterhouseCoopers.
We partner with you to navigate complexity with confidence—bringing the right technology, deep expertise, and scalable service to every stage of your DB strategy.