U.S. corporate pension plans in January 2014 gave up all of the gains they had achieved in the fourth quarter of 2013.
The funded status of a typical plan slid 4.2 percentage points to 91%, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG). Falling interest rates sent liabilities higher, and declining stocks sent assets lower.
“January’s decline was the largest monthly drop in funded status for U.S. corporate plans since May 2012,” says Andrew D. Wozniak, director, portfolio management and investment strategy, with the ISSG.
Public sector plans and endowments and foundations reported smaller declines in January. Investments in real estate and hedge funds helped endowments and foundations to mitigate their asset losses for the month.
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