BNY Mellon: Pension Assets Matched Liabilities in October

November 5, 2007 ( - Asset values at typical U.S. defined benefit plans kept pace with rising liabilities in October, according to BNY Mellon Asset Management data.

A news release about the firm’s BNY Mellon Pension Liability Indexes said the assets of a moderate risk pension portfolio increased 1.7% in October driven by rising equity markets in the U.S. and around the world, matching a similar liability increase.

The company said the typical U.S. plan improved its status year to date by 4.7%, with moderate risk assets up 9.1% and moderate risk liabilities higher by 4.4%.  That improvement built on a 2.4% improvement in September, which was aided by falling market volatility (see    U.S. Pension Plan Health Rebounds Slightly ).

Peter Austin, executive director of BNY Mellon Pension Services, attributed the October gain in liabilities to a nine-basis-point decline in long-maturity Treasury bond yields. Lower interest rates increase liabilities and the value of bonds.

“The capital markets shrugged off $94 oil, focusing instead on the second Fed easing in as many months,” he said in the news release. “The U.S. stock market has vaulted to a double-digit gain for the year and foreign markets have done even better with the help of a falling dollar.”