Defined benefit (DB) pension plans are relied upon by millions of Americans to fund their retirements. While participation in DB pensions in the United States has been on a steady decline, the $8 trillion invested in public and corporate sector DB plans at the end of 2021, representing about 20 percent of the $39 trillion U.S. retirement market, is growing. At the end of 2016, total U.S. DB assets were approximately $5.5 trillion. The investment returns generated by DB plans are of critical importance because reliance on contributions from existing, pre-retired members will not cover the substantial deficits that many plans find themselves saddled with following years of insufficient contributions, in part caused by what some see as unrealistic return assumptions.

However, during the past quarter century, returns generated by DB plans in the United States have been better than many industry observers might believe. Actuarial discount rates used by U.S. DB plans typically fall