While conventional wisdom might suggest that defined benefit plans are on their way out of the American workplace, the ongoing uptick in the economy and the financial markets has many financial executives taking a more positive look at the future of their pension holdings.

Getting on top of pension funding deficits – many of which have begun to slowly evaporate as investments once again have begun to return profits – as well as the continued struggle of dealing with health care costs, both remain key issues for top-level benefits decision makers.

New numbers from Prudential Financial Inc. and CFO Research Services suggest that the time is right for many financial executives to find that precarious balance between offering employee-attractive retirement and health care benefits and meeting the bottom line; the ever-improving economy is helping to make that an easier task.

Prudential’s “Managing Financial Risk in Retirement and Benefits Programs” paints a particularly rosy future for those once-doomed DB plans, with many financial executives now suggesting they can either reduce or largely eliminate the risks associated with plans, in the past.

See also: Improving markets expected to produce $20 billion drop in PBGC deficit

“The rebound in financial markets has not only restored the value of 401(k) plans but helped improve the funding levels of defined benefit plans as well, though market volatility and other risk factors remain a concern,” notes Phil Waldeck, Prudential’s senior vice president of pensions and structured solutions.

As a result, Waldeck says, DB plans can be further de-risked, and the increasingly popular defined contribution model can also be shored up.

Prudential’s research found that 35% of the companies surveyed – which had revenues between $500 million and $5 billion – had already closed their pension plans to new hires, and 25% had entirely frozen their DB plans.

Some 53% of financial executives reported that their companies had transferred their DB liabilities to a third party insurer or were likely to do so in the next two years. Prudential itself has had some not insignificant experience with this, as it worked out an arrangement with General Motors in 2012 to oversee some of the automaker’s ongoing pension responsibilities.

Among other cost-saving gestures, those contacted as part of the survey indicated they are attempting to outsource more of their benefits administration, especially management of FMLA responsibilities. Some 50% of executives surveyed say they are likely to outsource some or all of their benefits administration, on top of the 27 percent that already do so. Approximately 20% outsource their absence management and FMLA duties, with 45% thinking of doing so in the future.

And Prudential’s study indicates that interest in moving to private health care exchanges exists, though most companies are unlikely to move their workers out of their own health care plans into any of the ACA’s public exchanges. In the process, 80% of employers say they have taken small steps to transition more health care costs to their employees, and 41% saying they would be willing to provide subsidies to employees for them to use on private health insurance exchanges.

“Everyone is looking at how to better control benefit costs and health care is still the No. 1 issue,” says Jim Gemus, senior VP of product for Prudential. “But they are acutely aware of the need to retain employees and attract new ones. The improving economy and recovery of the financial markets is making it a bit easier to do this.”

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