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Employer-Provided Pensions’ Funded Status Improved in February

The funded status of corporate pensions in the United States was 87.5% in February, a jump of 5.1 percentage points since January, according to BNY Mellon Investment and Strategy Group (ISSG). What a difference a month makes: their funded status slipped by almost the same amount the month before.

February’s results are more than a reversal of January’s losses, ISSG says — it was the biggest increase in corporate pension plans’ funded status in four years. Why? ISSG said growth in assets doubled that in January; it attributed the 2.1% rise to gains in the stock market and equities markets. A 3.9% drop in liabilities also contributed to February’s results.

Not only was February a good month overall for employer-provided pensions, it also saw the biggest increases in the last 12 months — relative to their target performance — for foundations, public plans and endowments. ISSG said that the assets of foundations and endowments had a 3% return rate and that they are almost 1% behind their inflation plus spending target.