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 Falls To 91.0 Percent, According To BNY Mellon ISSG









NEW YORK, Feb. 4, 2014 /PRNewswire/ -- U.S. corporate pension plans in January 2014 gave up all of the gains they had achieved in the fourth quarter of 2013 as the funded status of the typical plan slid 4.2 percent to 91.0 percent, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG).    The BNY Mellon Institutional Scorecard for January noted falling interest rates sent liabilities higher and declining stocks sent assets lower.

Public defined benefit plans, endowments and foundations also lost ground in January as a result of the falling equity markets, ISSG said. 

"January's decline was the largest monthly drop in funded status for U.S. corporate plans since May 2012," said Andrew D. Wozniak, director, portfolio management and investment strategy, ISSG.

For U.S. corporate plans, assets fell 0.4 percent and liabilities increased 4.2 percent, ISSG said.  The increase in liabilities was due to a 27 basis-point decline in the Aa corporate discount rate to 4.66 percent, the report said.   Plan liabilities are calculated using the yields of long-term investment grade bonds. Lower yields on these bonds result in higher liabilities.

"Investors became more concerned about global growth fundamentals and the prospects for some emerging markets," Wozniak said.  "As they became more cautious, assets shifted to bonds, sending rates lower."

On the public side, assets at the typical defined benefit plan in January fell nearly 1.4 percent, missing the plans' monthly goal of positive 0.6 percent returns, ISSG said.  Year over year, public plans are ahead of their target by 1.5 percent, ISSG said.

For endowments and foundations, the real return was -1.4 percent, which was short of its target for spending plus inflation, ISSG said.  The report said assets fell 0.9 percent.  Investments in real estate and hedge funds helped endowments and foundations to mitigate their assets losses for the month, the report said.

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

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs