US - US pension plans have improved their funding status nearly 10% in the first five months of 2006, Mellon Financial Corporation has found.
Liabilities of a typical pension plan fell 7.5% during that period owing to higher interest rates, while assets of a moderate-risk benchmark portfolio went up 2.2%, said Mellon Pensions Services executive director Peter Austin.
This could mean a nearly 10% improvement in a plan's funded status, which is significant.
While that news was positive, Austin stressed interest rate changes, asset return volatility and regulatory pressures were forcing sponsors to keep a close eye on their pension plans.
Mellon tracks the fluctuations of liabilities owed by typical US pensions and compares them against the returns of benchmark portfolios that represent the assets of those plans.
By Damian Clarkson
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