Rising interest rates lowered corporate pension liability estimates in April, improving the average funding rate to 90.1 percent, a 2.9 percent increase, according to BNY Mellon Investment Strategy and Solutions Group.
The average corporate discount rate jumped 20 basis points during the month, to 4.06 percent, which accounted for nearly all of the overall funding improvement. Increased value of plan investments accounted for 0.7 percent of the overall 2.9 percent improvement.
"Corporate plans are seeing the benefits of a slight rise in interest rates, which have increased for three consecutive months and are pushing down liabilities," said Andrew D. Wozniak, head of fiduciary solutions, ISSG.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
