The funded status of a typical U.S. pension plan fell 0.2 percent in September as liabilities rose 1.7 percent, which was faster than the 1.5 percent rise in the value of assets at a typical moderate risk benchmark portfolio, according to Mellon Financial Corporation. Mellon tracks the financial health of U.S. pension plans through its Mellon Pension Liability Indexes.

"A good month in the stock market was not enough to keep up with the growth of pension liabilities," said Peter Austin, executive director of Mellon Pension Services. "The stock market reacted well to lower energy prices and the prospect that the Fed has ended its tightening. Unfortunately, the lower interest rates helped to boost the outstanding liabilities that pension plans face."

While lower interest rates have been the main cause of deteriorating pension plan finances over the last four months, the funded status of a typical plan was still more than 6 percent better at the end of September than it was at the beginning of the year, due primarily to interest rate increases during the first five months of the year. The assets of a typical plan were 6.7 percent higher at the end of September than they were at the beginning of the year, while liabilities were 0.5 percent lower.

Liabilities for pension plans usually fall when interest rates rise. Unexpected changes in a plan's demographics, among other factors, also affect the size of the benefit liability. Mellon measures the performance of liabilities through its Mellon Pension Liability Indexes, which were launched in March 2006. These indexes are designed to track the market values and market returns of pension liabilities for young, average and mature pension plans.