Pensions 73.6% Funded in October

November 5, 2012 ( – BNY Mellon attributed an October decline in U.S. corporate pension funding to falling interest rates and U.S. equities.

Funded status of U.S. corporate pensions declined to 73.6% because of decreased interest rates and a pause in the 2012 U.S. equities rally, according to BNY Mellon. This contributed to a 1.4 percentage-point decline in the funded status of the typical U.S. corporate pension plan for the month.

For the year through October 31, the funded status has declined 1.7 percentage points, the BNY Mellon Pension Summary Report for October indicated.  

Assets for the typical plan fell 0.7% as the equities rally in international markets failed to offset the decline in U.S. markets. Liabilities for the typical plan increased 1.1% as the Aa corporate discount rate declined six basis points to 3.72%.

“October appears to have been a lackluster month as investors await the election results,” said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the BNY Mellon Investment Strategy and Solutions Group.  “Investors preferred corporate bonds over Treasuries, which drove liabilities higher even as Treasury yields rose.”