The funding ratio of the typical U.S. corporate pension plan increased by 0.2 percentage points to 80.5% in November, a result of an increase in the Aa corporate discount rate, according to BNY Mellon Asset Management.
Assets for the typical plan declined 0.4% in November, with a 0.6% gain in U.S. equities offset by a 4.8% decline in international equities, according to a news release from BNY Mellon Asset Management. A 0.9 percentage point increase in the Aa corporate discount rate to 5.32% lowered liabilities 0.7% in November.
“We continue to move up from the nadir of funded status that was recorded at the end of August 2010, although we remain below the level that was reported at the beginning of this year,” Peter Austin, executive director of BNY Mellon Pension Services, said in the release. “The positive equity performances of the last three months and steadily rising interest rates have been a welcome change for plan sponsors. If these trends continue, we may see a recovery in funded status of the typical plan in excess of 10 percentage points for the last four months of the year.”
Mr. Austin was not immediately available for comment.