July's Stock Market Euphoria Does Not Translate into Gains for Funding Status BOSTON, Aug. 5 /PRNewswire-FirstCall/ -- Assets and liabilities for the typical moderate risk U.S. corporate pension plan both rose 5.4 percent in July, according to monthly statistics published by BNY Mellon Asset Management. This resulted in the funded status of the typical plan holding steady at 79.2 percent for the month. For the year, through July 31, 2009, the funding ratio for the typical plan is now up 5.3 percentage points from 73.9 percent at December 31, 2008, as represented by the BNY Mellon Pension Liability Index. "July's stock market euphoria has not translated into pension funded status gains," said Peter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management. "While U.S. stocks returned nearly eight percent and international stocks were up more than nine percent in July, these big gains were only enough to offset the rise in liabilities that plans face. This rise in liabilities was due to the decline in the discount rate on Aa corporate bonds to 5.88 percent from 6.28 percent at the end of June." Plan liabilities are calculated using the discount rate of long-term investment grade corporate bonds. Lower yields on these bonds result in higher liabilities. "Pension plan managers now must weigh the options of positioning their portfolio for further gains in the equity markets against adopting a defensive posture to protect against a rise in liabilities," said Austin. "A majority of corporate pension plans continue to be under funded. A continuing equity rally would lower the contributions that companies would need to make to their pension plans to achieve full funding. However, declining stock markets or a further drop in bond yields would put increasing pressure on the plans." Notes to Editors: BNY Mellon Asset Management is the umbrella organization for The Bank of New York Mellon Corporation's affiliated investment management firms and global distribution companies. 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 $20.7 trillion in assets under custody and administration, $926 billion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.8 trillion per day. Additional information is available at http://www.bnymellon.com/. All information source BNY Mellon Asset Management as at June 30, 2009, except where noted. This press release is issued by BNY Mellon Asset Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. A Bank of New York Mellon Company 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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