The funded status of the typical U.S. corporate pension plan declined 0.4 percentage points in March to 87.2%, as most equity categories fell.
These are the findings of the BNY Mellon Investment Strategy and Solutions Group (ISSG).
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Public DB plans in March missed their return target by 1.3% as assets had a negative return of 0.7%. Year over year, public plans remain below their return target by 2.7%, ISSG says.
For the typical U.S. corporate plan, assets in March decreased 0.5%, while liabilities fell 0.1% as the Aa corporate discount rate rose two basis points to 3.86%.
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The funded status is 4.9 percentage points lower than at this time last year and 0.1 percentage points lower than at the beginning of the year.
“March was a lackluster month for most markets, with little fluctuation in asset values,” says Andrew D. Wozniak, head of fiduciary solutions, ISSG. “However, volatility increased as investors anticipate a shift in U.S. monetary policy. Higher rates would reduce liabilities, although investors would have to decide where to allocate assets so they are best positioned in the new interest rate environment.”