U.S. Pension Plans Helped by Higher Stock Prices and Lower Liabilities, According to BNY Mellon Asset Management
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Typical Plan Is in Better Health than at Beginning of 2008
A rise in the equity markets combined with higher bond yields in May led to a gain of 3.2 percentage points in the funded status of the typical U.S. pension plan, according to BNY Mellon Asset Management. Higher yields on longer-term corporate bonds results in lower liabilities for the typical pension plan.
Assets of the typical moderate risk pension plan increased 0.8 percent, while liabilities declined 2.4 percent. For the year to date, the typical U.S. pension plan improved its funded status by 1.0 percentage points.
“For the first time in 2008, the typical moderate risk pension plan experienced an improvement in funded status,” said Peter Austin, executive director of BNY Mellon Pension Services. “Improving investor confidence helped the stock market, while higher oil prices and the apparent end of Fed easing drove bond yields higher. While this is good news for plan sponsors, we expect a continuation of funded status volatility over the course of 2008.”
BNY Mellon Asset Management is one of the world’s largest global asset managers with more than US$1 trillion in assets under management. The multi-boutique asset management model encompasses the investment skills of world class specialist asset managers who are amongst the most advanced and highly regarded names in money management. With investment expertise that spans the asset class spectrum, BNY Mellon Asset Management offers a comprehensive suite of beta-achieving and alpha-generating investment strategies to meet the unique needs of institutional investors.
The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $23 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at bnymellon.com.
Source: The Bank of New York Mellon Corporation
Web site: http://www.bnymellon.com/