NEW YORK, June 9, 2016 /PRNewswire/ -- According to
the BNY Mellon Institutional Scorecard, which is available online
here, the funded status of typical U.S. corporate defined benefit
(DB) plans increased by 0.3 percent in May, up to 80.2 percent.
Over the course of the month, assets grew by 0.5 percent, which
outpaced the increase in liabilities—up only 0.1 percent in
May.
Corporate discount rates in May remained at the same level as
the previous month, yielding 3.91 percent, which helped to keep
liabilities close to flat. On the year, assets are now up 4.9
percent, but that growth remains behind liabilities, up 9.2 percent
for typical U.S. corporate DB plan sponsors.
According to BNY Mellon estimates, the S&P 500 pension
deficit is estimated to have decreased by $6
billion in May, to $430
billion.
"The trend of asset growth being largely offset by liability
growth continued again in May." said Andrew
Wozniak, head of BNY Mellon Fiduciary
Solutions. "Funded status is about 15% below the 2013 high,
and lack of improvement of funding levels through capital markets
and the sense of urgency created by PBGC premium changes are
causing sponsors to consider formal funding policies despite the
latest round of funding relief."
In May, the typical public DB plan fell short of its target of
excess returns over a 7.5 percent annual return by 0.2
percent. Typical public DB plans are now up 0.3 percent against
their goal year-to-date, but remain 9.3 percent behind their 12
month target. May ended a two month streak of above-target returns
for typical public DB plans.
Endowments & foundations beat their goal of real return
in excess of inflation and 5 percent spending by 0.1 percent in
May. Endowments & foundations are up 1.2 percent against their
target year-to-date, but still 8.1 percent behind their 12 month
return target, despite modest inflation over the past year. REITs
were a factor in helping endowments & foundations achieve their
return target in May, returning 0.7 percent.
Of the other asset classes the scorecard tracks, U.S. Small Cap
and Large Cap Equities had a strong month, returning 2.3 and 1.8
percent, respectively. International equities did not fare as well,
as emerging market equities were down 3.7 percent, and developed
market equities were down 1.7 percent.
Credit markets saw mixed results in May as well, with High Yield
bonds up 0.6 percent; Long Duration Fixed Income up 0.3 percent,
and Global Fixed Income and Emerging Market Debt down 1.3 percent
and 0.3 percent, respectively.
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 March 31, 2016, BNY Mellon had
$29.1 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 March 31, 2016. 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.
Contact:
Scott Pepper
+1 212-635-1743
scott.pepper@bnymellon.com
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SOURCE BNY Mellon