BNY Mellon: U.S. Pension Funding Increases Across the Board in July

U.S. typical corporate and public pension plans, as well as endowments and foundations, saw increased returns in July thanks to the strong U.S. equity market, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG).

With a 1.6% increase in July, corporate plans now have a funded status of 88.2%, which is an 11.1% improvement year-to-date. ISSG found that these plans have raised allocations throughout the year to long maturity corporate bonds and alternative asset classes.

However, liabilities for corporate plans increased 0.9% as the discount rate on Aa corporate bonds fell four basis points to 4.65%.

Public plans fared even better with assets gaining 3.3% for the month, ahead of the 7.5% annual return target pace. These plans had a 2.7% excess return increase, bringing public plan assets ahead by 2.6% of their return target year-to-date.

Assets for endowments and foundations also rose 3%, which is ahead of the group’s 5% annual target.

As of July, ISSG’s pension funding report goes by the name of the BNY Mellon Institutional Scorecard, which now includes information about U.S. public plans and foundations and endowments, rather than just corporate plans.