The funding ratio of the typical U.S. corporate pension plan rose 4.6 percentage points to 75.9% in September on the strength of rebounding stock markets and a 0.06 percentage-point increase in the Aa corporate discount rate to 4.98%, according to an analysis by BNY Mellon Asset Management.
Assets for the typical U.S. corporate pension plan increased 5.7% in September, while liabilities dropped 0.7%.
U.S. equity holdings returned 9.4% in September, and international stock holdings returned 9.8%.
Peter Austin, executive director of BNY Mellon Pension Services, said in a telephone interview that the rally in equity markets helped plans recover from the 5.6 percentage-point funding ratio drop in August.
“Even though we’ve improved nearly 5% in terms of the funded ratio from last month, which is a sizable swing — one of the largest swings since we started these reviews (in 2006) — the absolute funding level is still weak at about 76%,” he said.
He noted that the funding ratio is still 7.6 percentage points below the 83% of January 2010.