Plunging global equity markets combined with declining yields of long-term Treasury bonds drove down the funded status of a typical U.S. pension plan by 7% in November, according to BNY Mellon Asset Management.

The funded status of the typical plan now has deteriorated by 2.7% for the year to date.

Assets of a moderate-risk pension portfolio decreased 1.9% in November, while the value of typical pension liabilities rose 5.1%. Year-to-date, moderate risk assets are up 7.1% while typical pension liabilities have increased 9.8%.

“The decline in equities pared the assets held by the typical U.S. pension plan,” says Peter Austin, executive director of BNY Mellon Pension Services. At the same time, flight to quality, recession fears, and expectations of a Fed easing brought about a large decline in interest rates.”

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Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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