U.S. Pension Funded Status Rose in March

April 3, 2012 (PLANSPONSOR.com) – U.S. corporate pension plans' funded status rose 3.6% to 79.8% in March, according to BNY Mellon Asset Management. 

The pension plans benefited from an increase in the Aa corporate discount rate, which resulted in lower liabilities, the BNY Mellon Pension Summary Report for March 2012 shows.  The funded status of the typical corporate plan has now increased 7.4% this year.

Assets for the typical corporate pension plan in March rose 1.3%, and liabilities fell 3.2%, BNY Mellon said.  The decrease in liabilities was due to the Aa corporate discount rate rising 25 basis points to 4.58%, according to the report.

“Both the equity markets and interest rates moved in the right direction in March, helping moderate risk corporate pension plans approach a funding level of 80%,” said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the BNY Mellon Investment Strategy & Solutions Group (a division of The Bank of New York Mellon).  “Further improvements in the funded status could encourage plans to increase their hedge against interest rate moves.”