The funded status of the typical U.S. corporate pension plan in April rose 0.7 percentage points to 89.2 percent, the eighth consecutive month of improvement, according to monthly statistics published by BNY Mellon Asset Management.
The funding ratio for the typical corporate plan has improved 4.9 percentage points since the beginning of the year.
BNY Mellon attributes this surge to rising global stock markets, which lifted assets for the typical corporate pension plan in April by 2.6 percent, outpacing the 1.8 percent rise in liabilities.
The report attributed the liability increase to the decline in the Aa corporate discount rate to 5.50 percent from 5.61 percent.
Plan liabilities are calculated using the yields of long-term investment grade corporate bonds. Lower yields on these bonds result in higher liabilities.
"Plan sponsors are becoming increasingly optimistic as funding levels improve, putting them in a better position to make strategic decisions about current and future asset allocations," said Peter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management.
A separate report published by consulting firm Mercer found that the funded ratio of companies that comprise the S&P 1500 was 88 percent as of April 30. This is up from 81 percent as recently as year-end.
This is the eighth month of improving funded status for S&P 1500 companies since a low point of 71 percent was reached in August 31, according to Mercer.
Perhaps more significantly, Mercer also estimates that on an accrued benefits basis (which excludes future salary growth) nearly one in four plan sponsors have fully funded benefit obligations compared to only one in 15 last August.