Pension Plan Funded Status Continues Improvement

February 4, 2011 ( - The funded status of the typical U.S. corporate pension plan climbed 3.3 percentage points higher to 87.6% in January, according to monthly statistics published by BNY Mellon Asset Management.

A news release said this is the fifth consecutive month of improvement, boosting the funded status for these pension plans to their best levels since October 2008.  

The BNY Mellon Pension Summary Report for January 2011 revealed assets for the typical corporate pension plan increased 1.4%, due to a 2.2% gain in U.S. equities and a 2.4% rise in international stocks. Liabilities fell 2.4% during the month as the Aa corporate discount rate rose 21 basis points to 5.64% from 5.43%.

“The funded status of the typical plan has now improved 16.3 percentage points since August, which continues the longest and steepest improvement in funded status since we began reporting our monthly pension statistics in 2006,” said Peter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management, in the announcement.  “A steady stream of encouraging economic news is resulting in more confidence in the equity and fixed income markets, which should result in continuing good news for U.S. pension sponsors.”