Funding ratios at the typical U.S. pension plan declined 0.9 percentage points in August as liabilities increased more than assets, according to BNY Mellon Asset Management.

Typical pension plan liabilities rose 1.7 percentage points, outpacing a 0.8 percentage-point increase for asset returns at a moderate risk portfolio. For the year to date, funding ratios for typical pension plans have fallen 4.0 percent.

"Longer-term corporate yields were down approximately six basis points, and that helped drive liabilities higher," said Peter Austin, executive director at BNY Mellon Pension Services. "While lower energy and commodity prices helped to send stocks higher, they could not keep up with the rise in liabilities. The Fed hinted that it will continue its accommodative monetary policy into 2009, which should keep rates at current levels. This suggests there will be little relief on plan funded status from liabilities, so any improvement in the funded status of these plans will have to come from asset returns."

Lower yields on longer-term corporate bonds result in higher liabilities for the typical pension plan.