Corporate Pensions Slammed by Downturn in November

December 9, 2008 (PLANSPONSOR.com) - The funding ratio at the typical U.S. corporate pension plan fell 13.4% in November, the worst monthly performance since the stock market crash of 1987, according to BNY Mellon Asset Management.

According to a BNY Mellon news release, declining interest rates sent liabilities soaring by 10.2%. Asset returns in a moderate risk portfolio (60% equities, 40% bonds) lost an additional 3.2% as global equity markets continued their decline in November.

For the year to date, funding ratios for typical plans have declined nearly 20%.

class=”stylegeorgia10ptjustifiedlinespacingsingle0″> “Pension plans have seen their equity investments fall by more than 40% over the course of the year,” said Peter Austin, executive director of BNY Mellon Pension Services, in the news release.  “Now in November, the drop in high-grade corporate yields has produced a steep increase in liability values.”

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