Typical Plan Saw Funded Status Decline More than 30 Percentage Points in 2008 BOSTON, Jan. 7 /PRNewswire-FirstCall/ -- Funding ratios at the typical U.S. corporate pension plan slid more than 11 percentage points in December, after falling more than 13 percentage points in November, according to BNY Mellon Asset Management. The two double-digit declines resulted primarily from falling rates of longer-term high grade corporate bonds. "The Fed's drive to bring down interest rates to help the economy has had the collateral effect of increasing the liabilities of typical U.S. corporate pension plans," said Peter Austin, executive director of BNY Mellon Pension Services. "Liabilities rose 20.3 percent in December as corporate bond yields dropped by 125 basis points. Small solace to plan sponsors was a year-end stock market rally that boosted asset returns by 3.2 percent in December. The combination of falling stocks and rising liabilities throughout 2008, reminiscent of the 'perfect storm' of 2001-2003, resulted in one of the worst years in memory. For the typical U.S. corporate plan, the funded status in 2008 fell 31.5 percentage points." Looking ahead, Austin said, "Market sentiment is pointing toward an increase in Treasury yields during 2009. We also see a continued narrowing of corporate spreads, led by the demand of plan sponsors to use long corporate bonds as a pension liability hedge. The damage inflicted in 2008, combined with continued volatility in the credit and equity markets, will require plan sponsors to carefully monitor their plans and consider various scenarios as they review their asset allocations and funding strategies. We are seeing plans take a variety of approaches to manage their risks in the current environment." The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.4 trillion in assets under custody and administration, approximately $1.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at bnymellon.com. DATASOURCE: The Bank of New York Mellon Corporation CONTACT: Mike Dunn, +1-212-922-7859, Web Site: http://www.bnymellon.com/

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