The funded status of the typical U.S. corporate pension plan declined in March.
According to the BNY Mellon Investment Strategy & Solutions Group (ISSG), the funded status fell 0.5 percentage points to 92.1% as liabilities increased faster than assets.
The BNY Mellon Institutional Scorecard for March noted liabilities rose 0.7%, outpacing the 0.3% increase in assets during the month.
On a year-to-date basis, the funded status of corporate plans is down 3.1 percentage points, according to the scorecard.
Public DB plans, endowments and foundations also lost ground as they failed to attain their targeted returns.
“Despite a high degree of volatility in March, the markets finished the month close to the same levels that they began,” says Andrew D. Wozniak, director, portfolio management and investment strategy, with the ISSG. “Asset returns were restrained, leading to slightly weaker funded status for corporate plans and preventing public plans, endowments and foundations from reaching their targeted returns.”
With the net decline in funded status through the first three months of 2014, plan sponsors were less motivated to reduce their exposure to market volatility, he explains, adding that this was in marked contrast to 2013, when we saw a significant move toward reducing risk.
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