BNY Mellon Sees Drop in Funded Status for U.S. Pensions
November 4, 2009
Bank of New York (BNY) Mellon Asset Management placed the blame on the U.S. stock market for the drop in funded status for U.S. pension plans last month.
The funded status dip is first in the past four months, BNY Mellon Pension Services Executive Director Peter Austin said in a release issued today.
BNY Asset Management stated that national corporate pension plans dipped to 79.9% funded status at the end of October, down from 80.3% in September.
In addition, the New York, NY-based firm reported that assets for the typical U.S. corporate plan were down 1.2%, surpassing the reported 0.6% drop in liabilities for the month, this according to BNY Mellon Pension Liability Index.
Austin said the drop comes from the recent decline on Wall Street. Last month, stocks fell 2.6% in the U.S. and international stocks decreased 1.2%, the release said.
“Concerns about the strength of the economic recovery impacted October results and will continue to influence investor behavior,” Austin said in his statement.
In the most recent market trend to reduce risk, Austin added that pension systems have increased interest in liability driven investing.
“Some pension plans have taken advantage of the rally in the equity markets and shifted assets from equities to long-term corporate bonds,” Austin commented in the release. “While improvement in funded status is an overarching goal for every pension plan, we continue to see a growing trend in alignment of risk measures.”
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