Best Level since March 2012
NEW YORK, February 5, 2013 — The funded status of the typical U.S. corporate pension plan soared 4.9 percentage points to 81.2 percent in January, its highest level since March 2012, as rising equities markets raised asset levels and higher interest rates reduced liabilities, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).
Assets for the typical plan in January increased 3.0 percent as equities markets rose more than five percent in the U.S. and international developed markets, according to the BNY Mellon Pension Summary Report for January 2013. Liabilities fell 3.2 percent as the Aa corporate discount rate rose 24 basis points to 4.13 percent, the report said.
Plan liabilities are calculated using the yields of long-term investment grade bonds. Higher yields on these bonds result in lower liabilities.
"This is a great start for the year for corporate pension plans in the U.S., and we've now had three months in a row of steady improvement in funded status," said Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG.
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 December 31, 2012, BNY Mellon had $26.7 trillion in assets under custody and administration, and $1.4 trillion in assets under management. Whether clients are looking to create trade, hold, manage, service, distribute or restructure investments, BNY Mellon can act as a single point of contact for their investment needs. 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 December 31, 2012. 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.