Podcast Center
Video Center
Webcasts
Resource Center
Events
March 10, 2016 at 11:01 AM
U.S. corporate defined benefit plans’ funded status tumbled again in February, falling by 1.3% to 78.7%, according to the BNY Mellon Institutional Scorecard, released Thursday.
This was the fourth consecutive month in which the funded status of the typical U.S. corporate pension plans decreased, the report said.
Last month, the funded status dropped by 3.8%.
Corporate pension assets returned 0.6% in February, while liabilities rose by 2.3% as discount rates fell by 14 basis points, to 4.2%.
Assets are now down 1.8% for the year and down 6.2% since February 2015. Liabilities, though up by 4.2% year to date, are down 1.6% over the past 12 months.
BNY Mellon noted in a statement that February’s increase in liabilities exceeded the returns of most asset classes during the month. Global fixed income and long duration fixed income assets did the best, both returning 2.2%.
Emerging market debt returned 1.3%, REITs 0.9% and high yield bonds 0.6%. February’s worst performer was international equity, which fell by 1.1%.
BNY Mellon estimated that the S&P pension deficit had swelled to $441 billion, an increase of $37 billion. This was largely due to rising liabilities, some $2.1 trillion, versus existing assets, estimated at $1.6 trillion.
“For over a decade, most plan sponsors and investment managers have been calling for a rise in interest rates,” Andrew Wozniak, head of BNY Mellon Fiduciary Solutions, said in the statement. “2016 is shaping up to be another humbling year in that regard.
