NEW YORK, Oct. 6, 2015 /PRNewswire/ -- The funded status of
the typical U.S. corporate pension plan declined in September for
the third consecutive month, dropping by 2.4 percentage points to
81.8 percent, and is now down year-to-date, according to BNY Mellon
Fiduciary Solutions. Public plans, foundations and endowments also
failed to meet targets due to declining asset
values.
For the typical U.S. corporate plan, funded status peaked at
85.5 percent on September 16 before
falling 3.7 percent in the second half of the month, driven by an
overall 1.9 percent decline in assets since August.
Meanwhile, liabilities increased 1.1 percent as the Aa Corporate
discount rate fell by six basis points. Plan liabilities are
calculated using the yields of long-term investment grade bonds.
Lower yields on these bonds result in higher liabilities.
"Investors continued to face strong headwinds in the market,
especially through the latter part of September," said Andrew D. Wozniak, head of BNY Mellon Fiduciary
Solutions. "Corporate defined benefit plan sponsors felt the
combined effects of both declining asset values and increasing
liabilities, which led to funded status declines for the typical
plan."
Public defined benefit plans in September missed their return
target by 2.8 percent as assets declined 2.2 percent, according to
the September BNY Mellon Institutional Scorecard. Public plans
have fallen short on year-to-date and one year return targets by
9.4 percent and 10.1 percent, respectively.
The September BNY Mellon Institutional Scorecard also noted that
endowments and foundations missed their spending plus inflation
target by 2.8 percent. According to the monthly report, asset
returns for the typical endowment and foundation fell 3.5 percent
over the past year, which is behind the spending plus inflation
target by 8.6 percent.
"High Yield securities and equities continued to struggle,
leading to the decline in asset values that hit typical public
defined benefit plans, endowments and foundations," said Wozniak.
"Fixed income ex-High Yield and REITs were the exception,
performing well over the month as investors moved away from
risk."
Notes to Editors:
BNY Mellon Fiduciary Solutions is a division of The Bank of New
York Mellon.
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of June 30, 2015, BNY Mellon had $28.6 trillion in assets under custody and/or
administration, and $1.7 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com.
Follow us on Twitter @BNYMellon or visit our newsroom at
www.bnymellon.com/newsroom for the latest company news.
All information source BNY Mellon as of June 30, 2015. This press release is qualified
for issuance in the US only and is for information purposes only.
It does not constitute an offer or solicitation of securities or
investment services or an endorsement thereof in any jurisdiction
or in any circumstance in which such offer or solicitation is
unlawful or not authorized. This press release is issued by BNY
Mellon Investment Management to members of the financial press and
media and the information contained herein should not be construed
as investment advice. Past performance is not a guide to future
performance. A BNY Mellon Company.
Contact:
Melissa Cassar
+1 212 635 6038
melissa.cassar@bnymellon.com
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SOURCE BNY Mellon