The funded status of the typical U.S. corporate pension plan rose 5.6 percentage points in May to 86.4 percent, the highest it has been since July 2011.
According to the BNY Mellon Investment Strategy & Solutions Group, the funded status is up 10.1 percentage points for the year because of a jump in the Aa corporate discount rate, which reduced liabilities.
Liabilities for the typical corporate plan fell 6.3 percent as the discount rate on the Aa corporate bonds increased 46 basis points to 4.3 percent, the sharpest rise in two years, the report said. Plan liabilities are calculated using the yields of long-term investment grade bonds. Higher yields on these bonds result in lower liabilities.
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