Funded Status of U.S. Corporate Pensions Rises Five Percent in February, According to BNY Mellon ISSG

Public Plans, Foundations and Endowments Also Gain

Mar 03, 2015, 10:40 ET from BNY Mellon

NEW YORK, March 3, 2015 /PRNewswire/ -- The funded status of the typical U.S. corporate pension plan increased 5.1 percentage points to 87.5 percent in February, more than offsetting January's declines, as surging equity markets boosted assets and rising interest rates resulted in lower liabilities, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).  

It was the best month for gains in the funded status of corporate plans since January 2011; and public plans, endowments and foundations had their best increases relative to their targets since February 2014, according to the BNY Mellon Institutional Scorecard.

For the typical U.S. corporate plan, assets in February rose 2.1 percent as U.S. stocks, international developed markets equities, and emerging markets equities all gained.  Liabilities for the typical corporate plan in February fell 3.9 percent as the Aa corporate discount rate rose 28 basis points to 3.84 percent. 

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

Public defined benefit plans benefited from their allocations to U.S. large cap equities and high yield fixed income, while the returns of endowments and foundations were boosted by private equity and emerging markets equities.

"The funded status for U.S. corporate plans is now in positive territory for 2015," said Andrew D. Wozniak, head of fiduciary solutions, ISSG.  "February capped the best three-month period for job growth in the U.S. in the last 17 years, and the strengthening employment situation was one of the important drivers of interest rates in February."

Public defined benefit plans in February beat their targets by 2.4 percent as assets returned 3.0 percent, according to the monthly report.  Year over year, public plans remain below their return target by 1.9 percent, ISSG said.

For endowments and foundations, the real return in February was 3.0 percent as assets returned 3.0 percent, ISSG said.  Year over year, endowments and foundations are behind their inflation plus spending target by 0.9 percent, ISSG said.

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 $1.7 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

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 Dec. 31, 2014, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.7 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, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of December 31, 2014. 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: Mike Dunn               +1 212 922 7859