Typical U.S. Pension Plan is Better Funded than at Beginning of Year

PITTSBURGH, October 9, 2007 — Rising equity markets boosted the funded status of typical U.S. pension plans by 2.4 percent in September, according to BNY Mellon Asset Management. The asset management group, which tracks the health of the pension plans through its BNY Mellon Pension Liability Indexes, reported that assets of a moderate risk pension portfolio increased 2.6 percent in September, far outpacing the 0.2 percent rise in a typical plan's liabilities.

"Lower volatility and an easing Federal Reserve brought relief to the capital markets in September," said Peter Austin, executive director of BNY Mellon Pension Services. "Long-maturity Treasury bond yields rose slightly, but high-grade corporate bonds tightened 10 basis points."

For the year to date, the typical U.S. plan has improved its funded status by 4.6 percent, with moderate risk assets up 7.3 percent and typical pension liabilities 2.7 percent higher. Lower interest rates increase liabilities and the value of bonds.

Unexpected changes in a plan's demographics, among other factors, also affect the size of the benefit liability. The BNY Mellon Pension Liability Indexes, which were launched in March 2006, are designed to track the market values and returns of pension liabilities for young, average and mature pension plans. (See more about the indexes at: http://www.melloninstitutional.com/public/knowledge/publications/content/publi cations/liability_index.html.) (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.)

BNY Mellon Asset Management is a leading global provider of investment management products and services that offers a broad range of equity, fixed- income, hedge and liquidity management products through individual asset management companies and multiple distribution channels.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 37 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $20 trillion in assets under custody and administration, more than $1 trillion in assets under management and services $11 trillion in outstanding debt. Additional information is available at http://www.bnymellon.com/.