Another factor is that tax regulations discourage sponsors from building surpluses in excess of 10 per cent. Partly as a result of these two factors, sponsors of defined-benefit plans have incentives to keep plans only minimally funded and to avoid surpluses.
But it is entirely appropriate, from time to time, for defined-benefit plans to run significant surpluses – or deficits – given the way they pool risks across all members – past, present, and future. BIS Review 47/2007  3  Secondly, sponsors can be hampered by regulations that do not always take sufficient account of their ability to make contributions in the future.