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Funded Status of U.S. Corporate Pensions Rises to 82.6 Percent, According to BNY Mellon ISSG
Highest Level in One Year
NEW YORK, April 3, 2013 - The funded status of the typical U.S. corporate pension plan increased 1.9 percentage points in March 2013 to 82.6 percent, its highest level since March 2012, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG). Year to date, the funded ratio has risen 6.3 percentage points, BNY Mellon ISSG said.
Assets for the typical corporate plan increased 2.1 percentage points as equity markets continued to rally despite concerns on the Cyprus banking situation, according to the BNY Mellon Pension Summary Report for March
Liabilities for the typical corporate plan decreased 0.3 percent in March, which the report attributed to the four- basis-point increase in the Aa corporate discount rate to 4.09 percent.
Plan liabilities are calculated using the yields of long-term investment grade bonds. Higher yields on these bonds result in lower liabilities.
"Plan funding levels have increased in four of the last five months and are nine percentage points higher than in October 2012," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG. "The markets appear to be shaking off the Cyprus banking situation and other potential volatility-inducing developments and focusing on positive corporate earnings. Pension plans have benefited significantly over the last five months and a significant number are looking to take steps to lock in these gains."
# # # 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 $1.4 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 www.bnymellon.com.
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 36 countries and more than 100 markets. As of December 31, 2012, BNY Mellon had $26.2 trillion in assets under custody and/or administration, and $1.4 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 www.bnymellon.com, or follow us on Twitter @BNYMellon.
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