NEW YORK, Feb. 8, 2016 /PRNewswire/ -- According to
the BNY Mellon Institutional Scorecard—which is available for
download, here—the funded status of typical U.S. corporate pension
plans fell by 3.8 percent in January, to 79.7 percent. The S&P
pension deficit is also estimated to have increased by $83 billion, to $411
billion over the month—as assets fell to $1.61 trillion, and liabilities rose to
$2.02 trillion. Despite asset returns
of negative 5.2 percent over the past year, the funded status of
the typical U.S. corporate pension plan have still increased by 2.0
percent over the last 12 months, up from 77.7 percent.
"Plan sponsors are beginning to lose their patience with the
onslaught of negative news surrounding their pension plans," said
Andrew Wozniak, head of BNY Mellon
Fiduciary Solutions. "Whether it is increased longevity driving
liabilities higher, poor investment returns or the negative impact
of lump sum payments on their funding percentage, some sponsors are
beginning to think that the only solution to their problem is
proactively funding their plans."
Public DB plans and foundations & endowments also performed
poorly in January, as they failed to meet the Scorecard's monthly
return targets, by 4.2 and 4.0 percent, respectively. Assets
dropped by 3.6 percent for both investor types.
The typical public DB plan is now 12.6 percent behind its
one-year return target as assets have, in total, dropped 5.1
percent over that time period. Similarly, foundations &
endowments are short of their annual return target by 12.0 percent,
despite modest inflation over the past year.
"The rally we saw in late December was short-lived, as markets
took a sharp drawdown in early and mid-January," said Wozniak. "Of
the asset classes our Scorecard tracks, only Global Fixed Income,
up 0.9 percent, and Long Gov/Credit,
up 2.1 percent, showed positive returns on the month. Equities of
all types, REITs, High Yield Bonds, Emerging Market Debt and Hedge
Funds were all down. It was certainly a tough environment for
investors."
January now marks the third consecutive month in which the
funded status of the typical U.S. corporate pension plans
decreased; and the third consecutive month in which public defined
benefit plans and foundations & endowments failed to meet their
monthly return targets.
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 Dec. 31, 2015, BNY Mellon had $28.9 trillion in assets under custody and/or
administration, and $1.6 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 December 31, 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:
Scott Pepper
+1 212-635-1743
scott.pepper@bnymellon.com
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SOURCE BNY Mellon