Pension Funded Status Declines to 80.7%

March 5, 2013 ( – The funded status of the typical U.S. corporate pension plan slid 0.5% points to 80.7% in February, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).

Year to date, the funded ratio has risen 4.4 percentage points.

Liabilities for the typical corporate plan increased 1.4% in February, outpacing the 0.8% gain in assets during the month, according to the BNY Mellon Pension Summary Report for February 2013.  The report attributed the gain in liabilities to the eight-basis-point decline in the Aa corporate discount rate to 4.05%.

The positive asset returns were driven by the rising U.S. equity markets in February, although asset gains were limited by the slight fall in international developed markets during the month, the report said.

“Plan funding levels took a small step back in February following three strong months of improvements,” said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG. “Political uncertainty regarding spending and revenue will likely keep funded status volatility elevated for the next several months.”

Kevin McGuinness