Tuesday, October 7, 2008
BNY Mellon Pension Services says the average corporate pension plan saw assets tumble last month 6.7%. That is more than the first 8 months of the year combined (4.3%). Pension Services Executive Director Peter Austin says the bright side is that funding ratios dropped only .3% because corporate bond yields jumped in September. He says once the markets calm down the yields will fall and that will cause funding ratios to climb. He says corporations will have to make adjustments not only to their current investments but also to the way the funds are managed. He says managers have learned in the least few months that they need to have a new appreciation for the risk and volatility in pension investments. He says these types of movements have never been seen before and managers will have to learn to be more proactive to dampen that volatility.