Funded Status of U.S. Corporate Pensions Rises to 74.4 Percent, According to BNY Mellon

Rising Equities Contribute to Improvement

Dec 05, 2012, 09:14 ET from BNY Mellon

NEW YORK, Dec. 5, 2012 /PRNewswire/ --  Rising equity markets in November helped drive the funded status of the typical U.S. corporate pension plan to 74.4 percent, a 0.8 percentage-point increase, according to BNY Mellon.  

Despite the November gain, the funded status for the typical plan has decreased 0.9 percentage points for the year through November 30, according to the BNY Mellon Pension Summary Report for November 2012.  

Assets for the typical plan in November rose 0.7 percent on the strength of rising equities markets. Liabilities fell 0.3 percent as the Aa corporate discount rate rose four basis points to 3.76 percent, BNY Mellon said.

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

"Investors remain cautious as considerable uncertainty remains regarding an agreement on the U.S. budget," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the BNY Mellon Investment Strategy and Solutions Group.  "After rising earlier in the year, liabilities have held steady recently as the discount rate used to calculate them has had little movement for the last four months."

Notes to Editors:

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

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