The funded status of the typical U.S. corporate defined benefit plan rose 2.9 percentage points to 90.1% in April as liabilities fell and assets increased, said the BNY Mellon Institutional Scorecard.
Liabilities fell 2.6% over the month, the result of a 20-basis-point increase in the discount rate to 4.06%.
“I think (breaking through that 90% funding threshold) is a key mental anchor for plan sponsors,” said Andrew D. Wozniak, head of fiduciary solutions of the investment strategy and solutions group within BNY Mellon Investment Management, in a telephone interview. “The last time (the typical corporate plan’s funding ratio) was above 90% was August 2014.”
April also marked the third consecutive month of discount rate increases.
“Inflation embers are beginning to glow,” Mr. Wozniak said on why discount rates have climbed higher.
Other plan types that BNY Mellon monitors — public DB plans and endowments and foundations — also performed positively.
The typical endowment and foundation returned 1.54% in April, edging out corporate and public DB investors, and was aided by its allocation to commodities, which returned roughly 12% in April.
The typical public DB plan returned 1.48% during the same period, boosted by its allocations to international equities, which returned 5.1% in April.
Corporate DB plans, the worst performing plan type with 0.66%, were held back by their allocations to long bonds, which returned -2.4% in April.
