April Equity Markets Boost Plan Funding

May 5, 2008 (PLANSPONSOR.com) - An April equity market rally led to a 1.5% improvement in the funded status of the typical U.S. pension plan, according to BNY Mellon Asset Management.

A news release said assets of the typical moderate risk pension plan increased 3%, more than offsetting the 1.5% rise in liabilities.  For the year to date, the funded status of the typical U.S. pension plan has declined 2.3%.

“U.S. stocks finally rallied after five months of negative performance as Fed easing and liquidity facilities calmed the markets,” said Peter Austin, executive director of BNY Mellon Pension Services, in the news release.   “However, corporate yield spreads narrowed impressively against Treasuries, with long corporate bond yields 10 basis points lower than last month.  Lower yields on longer-term corporate bonds resulted in higher liabilities for the typical pension plan.”