NEW YORK, May 3, 2013 /PRNewswire/ -- The funded status of the typical U.S. corporate pension plan fell 1.8 percentage points in April 2013 to 80.8 percent as liabilities posted their sharpest gains of the year, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG). Year to date, the funded ratio is up 4.5 percentage points, ISSG said.
Liabilities for the typical corporate plan rose 4.0 percent, which ISSG attributed to a decline in Aa corporate bond yields. Those yields declined 25 basis points to 3.84 percent. Plan liabilities are calculated using the yields of long-term investment grade bonds. Lower yields on these bonds result in higher liabilities.
Assets for the typical corporate plan increased 1.7 percent as equity markets rallied in reaction to diminishing concerns regarding the Cyprus banking situation, according to the BNY Mellon Pension Summary Report for April 2013.
"Interest rates fell as investors expect the Federal Reserve will affirm its commitment to bond purchases in its efforts to spur the economy," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG. "Pension plans continue to feel the effect of the Fed's quantitative easing program, as the growth in liabilities more than doubled the growth in assets during April."Notes to Editors: The BNY Mellon Investment Strategy and Solutions Group is a division of The Bank of New York Mellon. BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com. BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of March 31, 2013, BNY Mellon had $26.3 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon. All information source BNY Mellon as of March 31, 2013. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. A BNY Mellon Company.