The funded status of the typical U.S. corporate pension plan jumped 4.9% to 81.2% in January, the highest level since March 2012, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).
The increase was due to rising equities markets, which raised asset levels, and higher interest rates, which reduced liabilities, BNY Mellon says.
Assets in the typical plan rose 3.0% in January with the international equities markets up more than 5% in the month. Liabilities dropped 3.2% as the Aa corporate discount rate rose 24 basis points to 4.13%, according to a BNY Mellon report.
“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,” says Jeffrey B. Saef, managing director, BNY Mellon Investment Management, and head of the ISSG.
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