BNY Pension Indexes Show 4.4% July Decline

August 8, 2007 ( - A stock market slump and a sharp drop in interest rates in July caused a decline of 4.4% in the funded status of a typical U.S. pension plan, according to the BNY Mellon Pension Liability Indexes.

A news release from BNY Mellon Asset Management said that despite the severity of the July decline, the typical plan had improved its status by nearly 3% since January 1, 2007.

Assets of a moderate risk pension portfolio decreased 1.5% in July, while the value of typical pension liabilities rose 2.9%.  For the year to date, however, moderate risk assets are up 3.4% while typical pension liabilities are up 0.5%, according to the news release. 

Lower interest rates increase liabilities and the value of bonds. Unexpected changes in a plan’s demographics, among other factors, also affect the size of the benefit liability.


The BNY Mellon Pension Liability Indexes, which were launched in March 2006, are designed to track the market values and returns of pension liabilities for young, average and mature pension plans.

More information is  here .