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Rare Surplus

Pension Funds in Historic Surplus Eye $1 Trillion of Bond-Buying

  • Corporate plans ending years of shortfalls want to derisk
  • Funding ratio at biggest US pension plans surges to 110%
Bloomberg business news
Fixed Income Is 'Fashionable' Again: JPMorgan's Berro

For some of America’s biggest bond buyers, the soft-versus-hard-landing debate on Wall Street might be a sideshow. They’re getting ready to swoop in with as much as $1 trillion, no matter what happens.

One of the pillars of the trillion-dollar pension fund complex is now awash in cash after struggling under deficits for two decades. This rare surplus at corporate defined-benefit plans, thanks to surging interest rates, means they can reallocate to bonds that are less volatile than stocks — “derisking” in industry parlance.