Pension Funded Status Rose in December

Rising equity markets and falling liabilities combined to push the funded status of the typical U.S. corporate pension plan into positive territory in 2012.

According to the BNY Mellon Investment Strategies & Solutions Group (ISSG), for the month of December, the funded status for the typical plan increased 1.9 percentage points to 76.3%. The BNY Mellon Pension Summary Report for December said that for the year, the funded status was up 1.0 percentage point.  

Assets for the typical plan in December rose 0.9% as equities markets climbed. Liabilities fell 1.7% as the Aa corporate discount rate rose 13 basis points to 3.89%.  

“Plans benefited over the last six months as the discount rate has been slowly rising, leading to a decrease in liabilities,” said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG.  “At the same time, equities held on to the gains achieved earlier in the year, leading to the positive performance for all of 2012.”