U.S. corporate pension liabilities climbed an average 1.7% in September, compared with a 3.5% increase the previous month, driven by lower interest rates, according to the Mellon Pension Liability indexes. The average value of plan assets rose 1.5%, which caused the funded status of a typical U.S. pension plan to fall 0.2 percentage points last month.
Since the beginning of the year, corporate plans' average funded status is up 6%, according to Mellon's data. For the same period, the average plan's assets were up 6.7%, and liabilities were down 0.5%.
"A good month in the stock market was not enough to keep up with the growth of pension liabilities," said Peter Austin, executive director of Mellon Pension Services, in a news release. "The stock market reacted well to lower energy prices and the prospect that the Fed has ended its tightening. Unfortunately, the lower interest rates helped to boost the outstanding liabilities that pension plans face."
