Funded Status of U.S. Pensions Rises to 76.2 Percent in February, According to BNY Mellon
Fifth Month of Rising Stock Markets Contributes to Stronger Portfolios
BOSTON, March 2, 2012 /PRNewswire/ -- A fifth consecutive month of rallying equities helped to drive the funded status of the typical U.S. corporate pension plan 2.1 percentage points higher to 76.2 percent in February, according to BNY Mellon Asset Management. The pension plans also benefited from a slight rise in interest rates, which resulted in lower liabilities, according to the BNY Mellon Pension Summary Report for February 2012.
The funded status of the typical corporate plan has now increased 3.8 percentage points this year.
Assets for the typical plan in February rose 2.7 percent, as liabilities decreased 0.2 percent, BNY Mellon said. The decline in liabilities was due to a 3 basis point increase in the Aa corporate discount rate to 4.33 percent, according to the report.
Plan liabilities are calculated using the yields of long-term investment grade corporate bonds. Higher yields on these bonds result in lower liabilities.
"The equity markets have provided some relief to corporate pension plans for the last five months and we now are at our best funding levels since August 2011," said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the BNY Mellon Investment Strategy & Solutions Group (a division of The Bank of New York Mellon). "Corporate plans will need the rally in stocks to continue, a bump in interest rates, or a combination of these drivers to further close their funding gaps."
Notes to Editors:
BNY Mellon Asset Management is one of the world's leading asset management organizations, encompassing BNY Mellon's affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. 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 Asset Management as of December 31, 2011. 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 Asset 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(SM)
SOURCE The Bank of New York Mellon Corporation
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