Funded Status of U.S. Pensions Rises to 75.1% in November

December 7, 2011 ( - Liabilities fell faster than assets for the typical U.S. corporate pension plan in November. 

This resulted in a slight improvement in funded status. For the month, the funded status of the typical plan increased 0.3 percentage points to 75.1%, according to the BNY Mellon Pension Summary Report for November. Year-to-date, the funded status has declined 10 percentage points.

In November, assets for the typical corporate plan fell 0.7% as equity markets in the U.S. and other developed markets retreated, BNY Mellon data showed. Plan liabilities decreased 1.1% as the Aa corporate spreads widened 27 basis points. 

“The rally at the end of November enabled equities to regain much of the ground that they had been losing for the majority of the month,” said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the Investment Strategy & Solutions Group (a division of The Bank of New York Mellon). “By the time the dust had settled, we ended up with a very small change in funded status for the month.”

Market participants remain focused on the recovery of the U.S. economy, the U.S. budget deficit and the European debt crisis, Saef said. “These factors continue to drive interest rates, equity prices and corporate bond spreads, all of which affect the health of corporate pension plans.”