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Administration November 4, 2009
Pension Funding Status Falls Back in October
November 4, 2009 (PLANSPONSOR.com) - U.S. stocks
declined for the first time in eight months in October,
driving down the funding status of the typical U.S. corporate
pension plan by 0.4 %, according BNY Mellon Asset Management
data.
Reported by Fred Schneyer
A BNY Mellon news release said the funded status of the typical plan declined to 79.9% at the end of October, down from 80.3% at the end of September. Assets for the typical U.S. corporate plan decreased 1.2%, outpacing the 0.6% decline in liabilities during the month.
For the year, through October 31, the funding ratio
for the typical plan is up 6%, as represented by the BNY
Mellon Pension Liability Index.
“After four straight months of improving funding status,
the trend reversed as U.S. stocks fell 2.6% and
international stocks fell 1.2% in October,” said Peter
Austin, executive director of BNY Mellon Pension
Services, in the news release. “Concerns about the
strength of the economic recovery impacted October
results and will continue to influence investor
behavior.”
Austin continued: “Fortunately, the impact of the negative equity returns was partially offset by a small rise in the Aa corporate discount rate, which caused liabilities to decline slightly.”
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