The funded status of the typical U.S. corporate defined benefit plan rose 30 basis points to 80.2% in May as assets rose faster than liabilities, said the BNY Mellon Institutional Scorecard on Thursday.
Assets increased 0.45% over the month, and liabilities only 0.07%, as discount rates held steady for the month at 3.91%, BNY Mellon said.
Year-to-date, however, liabilities have risen faster than assets, resulting in a 3.3 percentage-point drop in funded status from the Dec. 31 level of 83.5%. Year-to-date through May 31, liabilities are up 9.2% and assets are up 4.9%.
“Funded status is about 15% below the 2013 high, and lack of improvement of funding levels through capital markets and the sense of urgency created by PBGC premium changes are causing sponsors to consider formal funding policies despite the latest round of funding relief.” said Andrew Wozniak, head of fiduciary solutions at BNY Mellon Investment Management, in a news release.
Separately, BNY Mellon found that the typical public DB plan returned 0.36% in May, missing its monthly return target of 0.6%.
On the other hand, the typical foundation and endowment returned 0.61%, beating its monthly return target of 0.51%.
Foundation and endowment returns were boosted by their higher allocations to real estate investment trusts, which returned 0.7% over the month; public DB plans were hampered by their higher allocations to international equity, which returned -1.7%, the report said.
