October 04, 2012
to BNY Mellon, the funded status of U.S. corporate pensions increased for the
second straight month to 75%, the first two-month winning streak since
The funded status of the typical U.S. corporate pension plan
increased 1.8 percentage points in September, benefiting from a decline in
liabilities as interest rates rose, the BNY Mellon Pension Summary Report for
September 2012 said.
Assets for the typical plan increased 1.7% as stock markets
in the U.S. and internationally continued to rally. Liabilities for the typical
plan declined .7% as the Aa corporate discount rate rose six basis points to
3.78%. Plan liabilities are calculated using the yields of long-term investment
grade bonds; higher yields on these bonds result in lower liabilities.
Year to date, the funded status of the typical U.S.
corporate plan is down .3 percentage points.
“Pension plans have been benefiting all year from rising
equity markets but have had their gains offset by persistent low interest rates
that have sent liabilities higher,” said Jeffrey B. Saef, managing
director of BNY Mellon Asset Management and head of the BNY Mellon
Investment Strategy and Solutions Group.