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Exhibit 1: Continued Increase In Funding Ratio, Driven Mainly By Positive Asset Returns; US Pension Fund Fitness Tracker Of The Typical US Corporate Plan's Funding Ratio (Graphic: Business Wire)

Stocks in this article: UBS

The funding ratio of the typical US pension plan increased again during the third quarter of 2013, rising by more than three percentage points to 91.4%, according to the UBS Global Asset Management US Pension Fund Fitness Tracker. Combined with gains in the first half of the year, the estimated year-to-date total improvement in funding ratio is close to 14 percentage points.

The improvement in funding ratio for the third quarter was driven primarily by a 3.6% increase in pension asset values. Liability values are estimated to have decreased by 0.2%, based on the average corporate plan’s reported asset allocation weightings from the UBS Global Asset Management Pension 500 Database and publicly available benchmark information.

The US equity market had a solid quarter, as the S&P 500 Index earned a total return of 5.2%. Through mid-September, there was a strong swing upward amid signs of a gradually improving economy. However, a selloff occurred late in the quarter, as the US Federal Reserve (Fed) surprised the market by delaying the reduction of its quantitative easing (QE) program due to continued concerns about the strength of the US economy. In Europe, no further government bailouts and signs of actual growth triggered a strong rally in equities. In dollar terms, the Euro Stoxx Index was up 16.4%. The slump in emerging markets appears to have subsided as well, as the MSCI Emerging Markets Index was up 5.9% in dollar terms. In particular, investors appeared less concerned about the outlook for China and other emerging markets.

Overall, the yield on 10-year US Treasury bonds increased by 12 basis points (bps), ending at 2.61%, after peaking at 2.98% during the quarter. The yield on 30-year US Treasury Notes increased by 18 bps, ending at 3.68%. High-quality corporate bond credit spreads, as measured by the Barclays Capital Long Credit A+ option-adjusted spread, ended the quarter 11 bps tighter. As a result, pension discount rates (which are based on the yield of high-quality investment grade corporate bonds) increased marginally, causing liabilities for a typical pension plan to end the quarter basically unchanged. (Please see disclosures for assumptions and methodology.)

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