Your H2 2026 Pension Playbook
- Jun 25
- 7 min read
All too often, the same pattern plays out. A sponsor enters Q3 intending to get organized, reaches Q4 realizing the window is closing, and starts the new year wondering how another twelve months passed without meaningful progress on the plan.
If your plan’s funded status is near its highest point in a decade, the question is worth asking directly: what are you waiting for?
Most sponsors I speak with can articulate a general intention to de-risk. Very few can point to a concrete plan for how or when. In a year where market conditions are arguably as favorable as they have been in recent memory, that gap has a real cost.
Here is what closing it looks like.
Step 1: Get an Independent Feasibility Study Done
Before making any decisions, sponsors need a clear picture of where their plan actually stands. The last valuation snapshot is not enough, and neither is a back-of-envelope estimate based on recent market movements.
An independent feasibility study provides that perspective. It helps answer the most important question:
What are our options from here?
A good study should cover:
Funded status and trajectory. Where does the plan stand today, including on a plan termination basis? Sponsors are often further along than they assume. What has driven recent changes, and how does the plan perform under different rate and market scenarios?
Available strategies at your current funding level. The right approach at 80% funded looks very different from the right approach at 100% funded. Understanding that distinction is what turns a general objective into an actionable plan.
Contribution timing and VRP impact. For underfunded plans, this is frequently overlooked. Variable-rate premiums accumulate quickly and are tied directly to unfunded vested benefits. A well-timed contribution made for the prior plan year before the deadline can be discounted back to the measurement date, generating an immediate 5.2% return by reducing the unfunded position. This should be modelled before any contribution decisions are made.
Data readiness. Are participant records complete and accurate enough to support a transaction?
Transaction options and sequencing. Should the plan consider a lift-out, lump sum window, full termination, or another approach? The answer depends on the sponsor’s objectives, timeline, and current funding position.
A journey plan that integrates funding, investment, and settlement strategy. A written roadmap from where the plan is today to where it needs to be, with clear milestones and decision points along the way.
That last piece is where most sponsors fall short. Funding and investment strategies frequently do not align with long-term de-risking goals. A plan aiming to minimize long-term cash contributions, for example, may need a higher allocation to return-seeking assets rather than an LDI-heavy portfolio that prioritizesfunded status stability. Identifying those disconnects early is a core part of what a good feasibility study does.
Most plans have a general desire to reduce pension risk. Very few have a documented plan showing what actions will be taken, when, and who needs to make the decisions. The journey plan is what closes that gap.
At Quantum Pension Solutions, we conduct feasibility studies at every stage of the de-risking process. Early-stage plans use them to set direction. Plans further along use them to pressure-test strategy and timing.
If you do not have a current journey plan, or have not revisited one in the last few years, this is the right place to start.
Step 2: Clean Your Data
Data quality remains one of the most consistent sources of delays and unexpected costs in pension risk transfer transactions. Insurers price based on participant records. Gaps, inconsistencies, and outdated information create uncertainty, and insurers price that uncertainty into their bids. That cost falls directly on the sponsor.
Done correctly, however, data remediation does more than prepare a plan for a transaction. It can reduce the liabilities the plan is actually carrying and lower PBGC premiums before a transaction ever begins.
Death audits and deferred vested participants
Deferred vested participants are where data tends to become most challenging. These are former employees, some of whom left decades ago, with benefits still sitting on the plan. Running a death audit against the Social Security Death Master File identifies participants who have passed away but remain in the plan population.
Every participant identified is a liability that should no longer exist. Removing them reduces the premium funding target and lowers both flat-rate and variable-rate PBGC premiums. For plans that have not run a recent audit, the savings can be meaningful, and the exercise is relatively low-cost.
For deferred vested participants who are still living, there are several issues worth addressing. Where a participant has passed their normal retirement date without commencing benefits, actuarial increases are typically required under the plan provisions. In our experience, annual valuations do not always capture these adjustments fully, which can result in an understated liability that compounds over time.
Required minimum distributions are another area that has received increasing attention from regulators. Plans that have not closely monitored their older deferred vested populations may find participants who should have been receiving payments for years. Left unresolved, RMD failures can result in significant compliance exposure. It is not an issue any sponsor wants to uncover in the middle of a transaction.
Finally, a meaningful portion of most deferred vested populations has outdated contact information. Locating those participants before going to market protects pricing and keeps the transaction timeline intact.
None of this is high-profile work. But it is exactly the kind of issue that accumulates quietly and surfaces at the worst possible moment.
Run a death audit. Review your deferred vested population. Confirm that past-NRD benefits are being increased correctly, that required minimum distributions are being paid to everyone who should be receiving them, and that participant addresses are current. If the honest answer to any of those is “we’re not sure,” that is where the work begins.
Step 3: Get Your Stakeholders Aligned
Pension risk transfer touches finance, treasury, HR, legal, investments, and the board. Building alignment across all of them takes longer than most sponsors expect, and the worst time to introduce a major pension decision is after bids are in and a year-end deadline is approaching.
We have seen transactions slip past year-end because a key decision-maker needed more time to understand the process. That month has a real cost: in pricing, in insurer availability, and sometimes in the transaction itself.
The conversations worth having before Q3 is over:
CFO or Treasurer Balance sheet and P&L impact, cash planning, and financial objectives
General Counsel Fiduciary process, required documentation, and decision framework
Investment Committee Portfolio positioning, liquidity, and premium funding strategy
Board Why the transaction is being considered, how insurers will be evaluated, and what approval is required
Identify who needs to be in the room and make sure those conversations happen before Q3 ends.
Step 4: Understand the Insurer Market
Not every insurer prices every population the same way, and the competitive dynamics of a given transaction depend on factors that vary significantly from plan to plan. Participant demographics, benefit structure, transaction size, and timing all influence which insurers are likely to bid aggressively and at what price.
Before launching a formal RFP, it is worth getting a clear pre-market read: which insurers are likely to be competitive for your specific population, and what is a realistic pricing range? This is also the time to work through structural questions. Should retirees be separated from deferred vested participants? Does a full termination make sense, or is a partial lift-out more appropriate? Are there timing considerations that affect insurer appetite? These decisions carry real financial consequences and are far easier to evaluate before a live process begins.
Ask your advisor for a pre-market assessment of insurer appetite and current pricing before launching the RFP process.
Step 5: Position the Portfolio
A well-funded plan can still face execution problems if the investment portfolio is not aligned with the transaction timeline. Three areas deserve attention:
Liquidity Can the plan fund a premium payment without being forced to liquidate illiquid positions at the wrong time?
Allocation Depending on the transaction structure, are liabilities properly hedged during the execution window? A lump sum window, for example, locks in the interest basis on expected payouts, which effectively removes that interest rate sensitivity during the window. Whether the remaining allocation still reflects the plan’s long-term funding objectives is a question worth asking now.
Duration Is the portfolio positioned to manage interest rate risk through to the transaction date?
The adjustments required are often modest. The key is identifying them early rather than reacting under time pressure after a transaction is underway.
Share your de-risking timeline with your investment manager and ask them to flag anything that needs to be addressed before the transaction window opens.
Step 6: Benchmark Your Vendor Fees
Sponsors focused on de-risking strategy often overlook something straightforward: they may be significantly overpaying for the services keeping the plan running. Administration, actuarial, recordkeeping, and investment management fees tend to increase quietly over time, particularly for frozen plans where fee structures were set years ago and have never been renegotiated. A fee that was competitive when the contract was signed may bear little resemblance to current market rates.
Areas worth reviewing:
Ongoing actuarial services
Recordkeeping and administration fees
Investment management expenses
Many sponsors have not benchmarked these services in years, and the variance between providers can be substantial. Q3 and Q4 are a natural time to do this work because most contracts renew on a calendar-year basis. In many cases, presenting a vendor with current market data is enough to produce meaningful savings. Most vendors would rather adjust pricing than risk losing the relationship.
Gather what you are paying across all service providers. If it has been more than two years since you last reviewed fees, it is worth a closer look.
Putting It All Together
These six steps are connected. The feasibility study establishes what is realistic and where the real opportunities are. Clean data and aligned stakeholders mean the plan can move quickly when conditions are right. Understanding the insurer market and positioning the portfolio prevents the kind of last-minute complications that derail otherwise well-prepared transactions. And benchmarking vendors ensures the plan is not carrying unnecessary costs while all of this is in motion.
For plans targeting a year-end transaction, the groundwork needs to be laid now. The decision about whether to pursue a retiree-only lift-out in 2026 and a broader transaction in 2027, or to aim for something larger this year, is one worth making deliberately, based on data and a clear-eyed view of readiness, rather than having it made by the calendar.
The sponsors who are best positioned at year-end will be the ones who used Q3 to do the work that does not feel urgent until it is.
If you would like to discuss what an independent feasibility study could look like for your plan, please reach out.