The funding ratio for the typical U.S. corporate pension plan rose 1.6 percentage points to 85.3% in February, according to an analysis by BNY Mellon Asset Management.
Assets for the typical corporate plan increased 1.8% in February, while liabilities decreased 0.1%.
Strong performance in U.S. stocks, particularly small caps and midcaps, helped to boost assets, Peter Austin, executive director of BNY Mellon Pension Services, said in a BNY Mellon news release.
“Plans also benefited from a slight increase in the Aa corporate bond rate, which moved from 5.92% to 5.96% and resulted in a slight decrease in liability values,” Mr. Austin said in the release.
He said corporate plans’ funding levels have rebounded over the last three months, “but economic troubles in the European Union and the overwhelming scale of the U.S. deficit reinforce the work ahead, which will likely result in ongoing pension funded status volatility.”
“We continue to see significant interest in liability-driven investing from plans looking to limit their exposure to volatility,” Mr. Austin said in the release.
Mr. Austin could not be reached for further comment by press time.