The funded status of U.S. corporate pensions climbed in November to 89.9 percent, with public plans, foundations and endowments also all beating targets thanks to increases in asset values.
That's according to the BNY Mellon Investment Strategy and Solutions Group, which said that the typical U.S. corporate pension plan saw an increase of 0.4 percent during the month as assets increased faster than liabilities.
The BNY Mellon Institutional Scorecard said that typically, corporate plans saw an increase of 1.5 percent in November, compared with an increase in liabilities of 1.1 percent. Even with that increase, the typical corporate plan has fallen 5.3 percent from the high in December of 2013 of 95.2 percent.
Recommended For You
According to ISSG, the November increase in assets for both corporate and public plans is a result of improvement in U.S. large cap and international developed market equities. On the other hand, improved funded status in endowments and foundations is owed to the performance of private equity and real estate investment trusts.
The increase in liabilities for corporate plans came about as a result of a six-basis-point drop in the Aa corporate discount rate over the month, to 4.14 percent.
"The rebound in funded status in November reversed the damage done in October," said Andrew D. Wozniak, head of fiduciary solutions, ISSG. "However, plan sponsors are bracing for changes in the way regulators view mortality assumptions used to value liabilities. These changes are likely to drive down the funded status for sponsors who will report earnings as of Dec. 31, 2014."
Public defined benefit plans, said the monthly report, beat November targets by 0.7 percent thanks to a rise in assets of 1.3 percent. However, ISSG said that year-over-year, public plans have underperformed their return target by 0.7 percent.
Endowments and foundations saw a real return in November of 0.6 percent, with assets returning 1 percent. Their year-over-year performance on inflation-plus-spending targets is behind by 0.5 percent, ISSG said.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
