Pensions - Articles - Funded Status of U.S. Corporate Pensions Declines to 80.7%


 The funded status of the typical U.S. corporate pension plan slid 0.5 percentage points to 80.7 percent in February as a decline in interest rates drove liabilities higher, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG). Year to date, the funded ratio has risen 4.4 percentage points, BNY Mellon ISSG said.

 Liabilities for the typical corporate plan increased 1.4 percent in February, outpacing the 0.8 percent gain in assets during the month, according to the BNY Mellon Pension Summary Report for February 2012. The report attributed the gain in liabilities to the eight-basis-point decline in the Aa corporate discount rate to 4.05 percent.

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

 The positive asset returns were driven by the rising U.S. equity markets in February, although asset gains were limited by the slight fall in international developed markets during the month., the report said.

 "Plan funding levels took a small step back in February following three strong months of improvements," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG. "Political uncertainty regarding spending and revenue will likely keep funded status volatility elevated for the next several months."

Back to Index


Similar News to this Story

Launch of the new Pensions Commission
Standard Life, Aegon, Aviva, Legal and General and PMI comment on the launch of the new Pensions Commission
Retirement confidence dips for 50 somethings
New research from Aegon reveals that only 33% of Britons aged 50–59 feel confident about retiring comfortably, the lowest of any age group. This midli
Pension Commission must deliver bold reforms
Comments from Kirsty Anderson, retirement specialist at Quilter on the DWP’s plan to revive the Pension Commission, including auto-enrolment reform an

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.