The typical U.S. pension plan's funded status improved by 2.4 percentage points in January, according to Mellon Financial's Pension Liability index. The increase was partly the result of strong U.S. equity returns and a 1.4-percentage-point drop in average liabilities for the month.
The decline in liabilities was "linked to a 10-basis-point increase in long-term rates. Continuing economic strength contributed to the higher long-term rates," Peter Austin, executive director of Mellon Pension Services, said in a news release.
Pension plan assets increased 9.2 percentage points on average in 2006, and liabilities increased 1.5 percentage points. Over the last five years, assets rose an annualized 3.8 percentage points, and liabilities were up 5.1 percentage points.