Corporate Pension Fund Liabilities and Funding Gaps The fixed nature of pension benefits under corporate defined benefit (DB) pension plans imply that plan sponsors face financial and potentially biometric risks. A large number of OECD countries have such DB pension schemes whereby employees receive a specific payment upon retirement and for which sponsoring employers are responsible to some extent for meeting any shortfall in pension funding relative to liabilities although across countries these schemes vary in importance. Recent financial market developments including in particular the post 2000 equity market correction and declining interest rates have illustrated the vulnerability of DB plan sponsor companies to financial risks. While it is difficult to form a judgement about the exact magnitude of the funding gaps that have arisen estimates of such gaps were considered to be of sufficiently large scale to raise concern amongst policymakers. Policy responses run the gamut from relief measures intended to lessen temporarily the financial pressures on sponsoring...