The funded status of a typical U.S. corporate defined benefit plan dropped to 90.8% in July, down 1.2 percentage points from June, said the BNY Mellon Institutional Scorecard.
Assets fell 1% in July while liabilities rose 0.3%. The rise in liabilities was the result of the discount rate remaining at 4.32% for the second consecutive month, said BNY Mellon Investment Management.
Separately, the typical public DB plan returned -1.4% on its assets in July, failing to meet its monthly return target of 0.6%.
The typical foundation and endowment returned -1.7% on its assets due to declines in small-cap stocks and private equity.
Losses at corporate plans were softened by their allocation to long-duration corporate bonds, said Andrew D. Wozniak, head of fiduciary solutions of the investment strategy and solutions group within BNY Mellon Investment Management.
Regarding the other asset classes, emerging markets equity had a positive month, returning 1.9% while small-cap equity had a “dismal” month, returning -6.1%, Mr. Wozniak said.
The drop in funded status brought the typical corporate DB plan down a total of 4.4 percentage points from a high of 95.2% at the end of December, said Mr. Wozniak.