A typical U.S. pension plan’s funded status improved by 10.9 percentage points in 2006, according to Mellon Financial Corporation.
“Interest rates finished the year higher, reducing the value of liabilities for the typical plan,” says Peter Austin, executive director of Mellon pension services. “At the same time, rising equity markets contributed to higher assets at the typical U.S. pension plan.”
In 2006, assets at a moderate risk U.S. pension plan rose 12.1%, significantly outpacing the 1.2% rise in typical liabilities.
During the last five years, pension plans have managed to keep pace with liabilities: assets have increased 7.3% while liabilities have climbed 7.1%.
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