Last month’s stock market rally helped improve the funded status of the typical pension plan in the United States, according to BNY Mellon Asset Management.
Assets of the typical moderate risk pension plan increased by 3%, offsetting the 1.5% rise in liabilities.
“U.S. stocks finally rallied after five months of negative performance as Fed easing and liquidity facilities calmed the markets,” says Peter Austin, executive director of BNY Mellon Pension Services.
However, he adds, corporate yield spreads narrowed against U.S. Treasuries, with long corporate bond yields 10 basis points lower than last month, Lower yields on longer-term bonds resulted in higher liabilities for the typical pension plan.
On a year-to-date basis, the funded status of the typical plan has declined 2.3% points.
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