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Rising Bond Yields Aid Pensions

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An increase in bond yields probably helped large U.S. defined benefit pension plans overcome a drop in stock prices in October.

An asset-liability performance index provided by Towers Perrin Forster & Crosby Inc. inched up to 67.4 at the end of the month, from 67.3 at the end of September, according to consultants in the firm’s Stamford, Conn., office.

The index stood at 79.3 stood at Oct. 31, 2008.

The total plan funded ratio dropped to 78.8% Oct. 31, up from 77.5% at the end of fiscal year 2008, but down from 103.1% at the end of fiscal year 2007.

Towers Perrin bases the index on the performance of assets and liabilities at a hypothetical benchmark pension plan. The firm gets funded status figures by tracking the actual pension results reported by 300 large U.S. companies.