The typical US pension plan improved 1.5 percent in October, reaching 2.5 percent for the year, according to Mellon Financial Corporation. The increase in asset values was higher than an estimated 1 percent increase in liabilities.
“A strong performance from global stock markets led to higher asset levels in typical US pension plans during October,” says Peter Austin, executive director of Mellon Pension Services. “This more than offset the slight increase in liabilities caused by a small decline in long-term interest rates.”
Mellon reports that, at the end of October, the average fund was up 7.8 percent from the beginning of the year because of a double-digit return on equities and interest rate hikes during the first five months of 2006. The typical plan’s assets saw a 9.3 percent increase between January and October, while liabilities were 1.5 percent higher.