Bank of New York Mellon Asset Management has reported the funding status of U.S. pension plans improved by 3.9 percentage points last month.
According to the company, the increase was driven by a second consecutive month of strong performances by global equity markets.
Assets for a typical portfolio increased 6.7 percent in April, compared to the 1.4 percent gain in liabilities during the month. For the year to date, the funding ratio for the typical plan is up 9.5 percentage points, as represented by the BNY Mellon Pension Liability Index.
Peter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management also noted that corporate bond spreads, while narrowing in April, continue to be above average past levels.
"We continue to be wary of narrowing corporate spreads, which have the potential to increase liabilities," he said, adding, "At that point, plans will need additional help from equities to protect their funded status or they will need to be particularly astute in managing their exposure to liabilities through effective asset allocation."
The Bank of New York Mellon Corporation is a financial services company operating in 34 countries. It has $20.2 trillion in assets under custody and administration, $928 billion in assets under management, services more than $11 trillion in outstanding debt and processes global payments averaging $1.8 trillion per day.