Corporate Plan Funding Retreats in April

May 10, 2010 ( – A plunge in the Aa corporate discount rate in April drove liabilities higher and the funded status lower for the typical U.S. corporate pension plan, BNY Mellon Asset Management reported.

A news release said the funded status in April declined 1.8% points to 86.3%. Through the end of April, the funded status of the typical U.S. corporate plan is up 0.8 percentage points for the year.

The Aa corporate discount rate in April fell from 5.96% to 5.72%. This led to a 3.4% increase in liabilities, which more than offset the 1.3% increase in assets at the typical U.S. corporate plan in April.

“While U.S. stocks experienced their third consecutive positive month in April, international stocks declined, partly due to the strengthening U.S. dollar,” said Peter Austin, executive director of BNY Mellon Pension Services, in the news release  “Taken together, equities in general were too weak to overcome the increasing liabilities that typical U.S. corporate pension plans faced in April.”