Investing May 3, 2007

U.S. Pension Funding Inches Up 1.8% in April

May 3, 2007 (PLANSPONSOR.com) - The funded status of a typical U.S. pension plan climbed slightly by 1.8% for the month of April, according to the Mellon Pension Liability Indexes.
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The index showed assets in moderate-risk portfolios increased 2.7%, while the value of typical pension liabilities rose 0.9%.

Peter Austin, executive director of Mellon Pension Services, said in a press release  that the marginal uptick was driven by a decline in long maturity interest rates, which fell four basis points during the month. “Lower yields increase the value of bonds and pension liabilities,” said Austin.

He further noted that the activity in the bond market was overshadowed by the rise in assets that was propelled by stock market increases.

According to the news release, the funding status for U.S. pension plans improved by 3.5%, with moderate-risk assets rising 4.4%, versus a 0.9% increase in liabilities.

For more information about the indexes, go  here .

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