August 04, 2015

Funded Status of U.S. Corporate Pensions Falls to 86.7 Percent, According to BNY Mellon ISSG

Endowments and Foundations Fail to Meet Targets, Public Plans on Track

NEW YORK, Aug. 4, 2015 /PRNewswire/ -- The funded status of the typical U.S. corporate pension plan declined, falling 1.1 percentage points in August to 86.7 percent.  Liabilities increased more rapidly than assets during the month, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).  

The typical U.S. corporate plan suffered from increased liabilities of 2.3 percent.  This was driven primarily by Aa Corporate discount rates which fell 14 basis points over the month to 4.36 percent.

"This was the first monthly drop in Aa corporate discount rates since January; however rates remain well above beginning of year levels. The typical corporate plan's funded status remains positive despite the drop in discount rates, posting a 4.4 percent improvement for the first seven months of the year," said Andrew D. Wozniak, head of fiduciary solutions, ISSG.

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

Public defined benefit plans met their return targets in July, however this is just the second month in 2015 where the Typical Defined Benefit Plan met or exceeded its return, ISSG said. 

Public plans have still fallen short on year to date return targets of 4.3 percent and remain below their annual return target, ISSG said.

The July BNY Mellon Institutional Scorecard also noted that for endowments and a foundations, the real return was down -0.6 percent. 

"Endowments and Foundations struggled to meet their target as assets declined, primarily due to the decline in commodities and poor Emerging Equity performance," said Wozniak. 

Notes to Editors:

The BNY Mellon Investment Strategy and Solutions Group is a division of The Bank of New York Mellon.

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 35 countries and more than 100 markets.    As of June 30, 2015, BNY Mellon had $28.6 trillion in assets under custody and/or administration, and $1.7 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 Follow us on Twitter @BNYMellon or visit our newsroom at for the latest company news.

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Melissa Cassar


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