The funded status of the typical U.S. corporate pension plan in June increased 0.8 percentage points to 88.5 percent as assets fell less than liabilities, according to monthly statistics published by BNY Mellon Asset Management.

Liabilities for the typical plan fell 2.1 percent as the Aa corporate discount rate increased 19 basis points to 5.53 percent from 5.34 percent, according to the BNY Mellon Pension Summary Report forMay 2011. Plan liabilities are calculated using the yields of long-term investment grade corporate bonds. Higher yields on these bonds result in lower liabilities.

Assets for the typical plan fell 1.1 percent, reflecting declines in U.S. and global equities, the report notes.

"The June results reversed some of the losses that pension funds sustained in May," saidPeter Austin, executive director of BNY Mellon Pension Services, the pension services arm of BNY Mellon Asset Management. "However, the volatility in equity returns in recent months reflects the fragility of the global markets. The risk of further deterioration in asset values complicates the decision-making of plan sponsors."

Austin noted that one course for plan sponsors would be to lock in the improvements in pension funding that have been achieved since the funded status reached a nadir inAugust 2010. He said the other choice would be to maintain a more aggressive asset allocation posture in an effort to improve the funded status of their plans through asset returns.

The statistics for the first six months of 2011 were adjusted to reflect updated information obtained from Standard & Poor's® regarding the funded status of the companies comprising the S&P 500 Index. BNY Mellon typically does its annual revision of these statistics every June.