Rising long-term interest rates and a recovering stock market helped improve the funded status of a typical U.S. pension last month, according to Mellon Financial.

The funded status increased by 2.6 percentage points.

“The rebounding stock market and rising interest rates put the typical U.S. pension plan back in positive territory for the year,” says Peter Austin, executive director of Mellon Pension Services.

Pension plans seeking to reduce their exposure to the volatility of the markets will have to pay closer attention to matching their assets and liabilities, he says.

For the first three months of the year, the funding status of a typical U.S. pension plan improved by about 1.7%, matching the increase in assets as liabilities held steady.

To comment on this story email craig.sebastiano@rci.rogers.com.

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

Join us on Twitter