This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Funded Status Of U.S. Corporate Pensions Rises To 88.2 Percent In July, According To BNY Mellon ISSG

NEW YORK, Aug. 5, 2013 /PRNewswire/ -- The funded status of the typical U.S. corporate pension plan in July increased 1.6 percentage points to 88.2 percent, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG). Year to date, the funded ratio is up 11.1 percentage points, ISSG said.

The funded status for June 2013 and all prior months have been updated to reflect the changing asset mix of corporate pension plans.  These plans increasingly have been implementing liability driven investing programs, which raise allocations to long maturity corporate bonds.   The new asset mix also reflects an allocation to alternative asset classes.  

Another change in July is the new name of the pension funding report, the BNY Mellon Institutional Scorecard, as the report now includes information about U.S. public plans and foundations and endowments.

"The new funded status numbers better explain the strategies being implemented," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG.  "The historical information also was revised to keep the comparisons relevant."

Saef added that the new information on public plans and foundations and endowments was added in response to requests from clients.  "Our original report on corporate plans has been enthusiastically welcomed, and we added the new information as clients in those sectors began requesting it."

For U.S. corporate pension plans, the July improvement was driven by a 2.7-percent increase in assets, which was propelled by strong U.S. equity returns.  Liabilities for the typical plan increased 0.9 percent as the discount rate on Aa corporate bonds fell four basis points to 4.65 percent.  

Plan liabilities are calculated using the yields of long-term investment grade bonds.  Lower yields on these bonds result in higher liabilities.

In the public sector, typical defined benefit portfolios outpaced their annualized 7.5 percent return target, as assets rose 3.3 percent over the month.  For the month, the excess return for these plans was 2.7 percent as strong equity market returns were the main drivers for this positive performance.   Year-to-date, plan assets are ahead of the return target by 2.6 percent.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs