The funded status of U.S. corporate pension plans continued to increase after a five-month rally in equities. The funded status of the typical U.S. pension rose 2.1% last month to 76.2%, according to BNY Mellon.
Assets for the typical plan in February rose 2.7%, while liabilities decreased 0.2% on the back of slightly higher interest rates, the firm says. Aa corporate discount rates rose three basis points to 4.33%.
Funded status of the typical pension rose 1.7% in January.
“The equity markets have provided some relief to corporate pension plans for the last five months and we now are at our best funding levels since August 2011,” says Jeffrey B. Saef, managing director of BNY Mellon Asset Management and head of the BNY Mellon Investment Strategy & Solutions Group. “Corporate plans will need the rally in stocks to continue, a bump in interest rates, or a combination of these drivers to further close their funding gaps.”
(CG)