Declining yields of Treasury bonds were the main reason for a 0.9% decline in the funded status of a typical U.S. pension plan in August, according to BNY Mellon Asset Management.

The declining yields led to a 2% increase in the typical plan’s liabilities, versus a 1.1% increase in the assets of a typical moderate risk portfolio.

“The continuing liquidity difficulties in the fixed income market during August once again brought a flight to quality,” says Peter Austin, executive director of BNY Mellon Pension Services. “Treasury yields dipped an average of 12 basis points, increasing the value of pension liabilities. U.S. stocks recovered half of the losses they incurred during July, but international stocks were once again weak.”

Year-to-date, the funded status of a typical plan is 2.0% better than it was at the beginning of the year as moderate risk assets are up 4.5% versus a 2.5% increase in liabilities.

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