Funded Status of U.S. Corporate Pensions Falls Again in December, to 83.5 Percent, According to BNY Mellon Fiduciary Solutions' Monthly Institutional Scorecard

Late month rally helps corporate DB plans finish up 1.2 percent on the year

Jan 06, 2016, 10:00 ET from BNY Mellon

NEW YORK, Jan. 6, 2016 /PRNewswire/ -- According to the BNY Mellon Institutional Scorecard -- which is available for download, here -- the funded status of the typical U.S. corporate pension plan fell by 1.0 percent in December, to 83.5 percent. On December 11, funded status fell as low as 81.8 percent, but rallied to finish the month strong -- up 1.7 percent from that point. Despite monthly declines in both December and November, the funded status of the typical U.S. corporate pension plan still finished up 1.2 percent for the year.

Public plans and foundations & endowments both failed to meet the Scorecard's monthly return targets, and finished behind their one-year return targets by 9.0 and 8.1 percent, respectively.

For the typical U.S. corporate plan, Aa corporate discount rates rose by 43 basis points over the course of the year, to 4.43 percent, which led to a 2.9 percent drop in liabilities, year-to-date. For the month, assets fell by 1.5 percentage points, and finished the year down 1.5 percent.

"Despite another down month in December, it was encouraging to see a second-half rally, following anticipated monetary policy changes by the FOMC," said Andrew D. Wozniak, head of BNY Mellon Fiduciary Solutions. "Even with the volatility that's hit markets in the latter-half of 2015, it was good to see plans finish out the year in positive territory."

Public defined benefits in December missed the Scorecard's annualized 7.5 percent return target by 2.1 percent, as assets decreased by 152 basis points. Overall, public plans fell short of their yearly return target by 9.0 percent.

The December BNY Mellon Institutional Scorecard also noted that endowments and foundations missed their 5 percent monthly spending plus inflation target by 2.1 percent. Asset returns for the typical endowment and foundation finished the year down 2.6 percent, and fell even further behind the spending plus inflation target, to 8.1 percent.

"Most asset classes failed to help investors meet return targets in December," said Wozniak. "Bright spots in the month were REITS and Global Fixed Income, up 1.3 and 0.5 percent respectively. And still, even as equity markets continued to struggle, it was encouraging to see the S&P 500 and Barclays Aggregate both finish up on the year."

Notes to Editors:

BNY Mellon Fiduciary Solutions is a division of The Bank of New York Mellon. To view past BNY Mellon Institutional Scorecard data, click here.  

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 35 countries and more than 100 markets. As of Sept. 30, 2015, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 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. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

All information source BNY Mellon as of September 30, 2015. 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.              

Contact:                       
Scott Pepper                                    
+1 212-635-1743                          
scott.pepper@bnymellon.com

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SOURCE BNY Mellon



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