Funded Status of U.S. Corporate Pensions Declines to 80.7 Percent, According to BNY Mellon ISSG Liabilities Rise Faster than Assets

NEW YORK, March 5, 2013 /PRNewswire/ -- The funded status of the typical U.S. corporate pension plan slid 0.5 percentage points to 80.7 percent in February as a decline in interest rates drove liabilities higher, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).  Year to date, the funded ratio has risen 4.4 percentage points, BNY Mellon ISSG said.

Liabilities for the typical corporate plan increased 1.4 percent in February, outpacing the 0.8 percent gain in assets during the month, according to the BNY Mellon Pension Summary Report for February 2012.  The report attributed the gain in liabilities to the eight-basis-point decline in the Aa corporate discount rate to 4.05 percent.

Plan liabilities are calculated using the yields of long-term investment grade bonds.  Lower yields on these bonds result in higher liabilities.

The positive asset returns were driven by the rising U.S. equity markets in February, although asset gains were limited by the slight fall in international developed markets during the month., the report said.

"Plan funding levels took a small step back in February following three strong months of improvements," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG.  "Political uncertainty regarding spending and revenue will likely keep funded status volatility elevated for the next several months."

Notes to Editors:

The BNY Mellon Investment Strategy and Solutions Group is a division of The Bank of New York Mellon.

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of December 31, 2012, BNY Mellon had $26.2 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of December 31, 2012. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management to members of the financial press and media and the information contained herein should not be construed as investment advice.  Past performance is not a guide to future performance.  A BNY Mellon Company.

SOURCE BNY Mellon



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