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The funded status of a typical U.S. pension plan was largely unchanged in June, despite market weakness, according to BNY Mellon Asset Management, which tracks the financial health of U.S. pension plans through its BNY Mellon Pension Liability Indexes. For the year to date, the typical plan has improved its funded status by 7.4 percent.
"As a result of the soft equity markets, the assets of a moderate risk pension portfolio declined one percent in June," said Peter Austin, executive director of BNY Mellon Pension Services. "However, this was offset by a similar decline in typical pension liabilities, as long-maturity interest rates rose 11 basis points during the month. Higher interest rates reduce liabilities and the value of bonds."
For the first half of the year, assets of a typical moderate risk portfolio increased 5.0 percent while liabilities declined 2.4 percent, resulting in the 7.4 percent improvement in funding status.
Unexpected changes in a plan's demographics, among other factors, also affect the size of the benefit liability. The BNY Mellon Pension Liability Indexes, which were launched in March 2006, are designed to track the market values and returns of pension liabilities for young, average and mature pension plans.
The Bank of New York Mellon Corporation (NYSE:BK)
http://www.bnymellon.com/.

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