October Sell-Off Hits Plan Funding Ratio

By Staff Report

Nov. 13, 2008

The funding ratio of the typical public and private U.S. defined-benefit plan with a moderate-risk portfolio dropped 3.7 percentage points in October, dragged down by the dramatic sell-off in the global equity markets, according to a BNY Mellon Asset Management report.

Pension-funding ratios for public and private plans have declined 7.7 percent year to date, spokesman Mike Dunn said.

“This was the largest decline in funded status for a single month since we started tracking pension funding in March 2005,” Peter Austin, executive director of BNY Mellon Pension Services, said in the report. “The picture would have been worse if equities hadn’t rallied during the last week of October.”

Austin said the drop in asset values was only partially offset by a 7.3-percentage-point drop in typical plan liabilities.

Filed by John D’Antona Jr. of Pensions & Investments, a sister publication of Workforce Management

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