The funding ratio of the typical U.S. corporate defined benefit pension plan increased 80 basis points to 88.5% in June, according to BNY Mellon Asset Management.
While assets for the typical plan fell 1.1% in June, liabilities fell 2.1% for the month, as the corporate discount rate increased 19 basis points to 5.53%, according to a BNY Mellon news release.
Peter Austin, executive director of BNY Mellon Pension Services, said in a telephone interview that the challenge for plan sponsors is the range of concerns hovering over capital markets, such as a stalled recovery, concern over the U.S. debt ceiling and issues associated with European countries.
“The last 12 months have seen strong equity markets and rates rise and (then) markets sell off and rates drop; it is difficult,” he said. “The mantra (for plan sponsors) remains derisking.”
He said more companies are adopting risk reduction programs that are focused on long-term goals that “better weather these episodic sort of situations where we see markets gyrate.”
