Multiemployer plans improved their average withdrawal liability funded ratio to 84% in 2007 from 81% the previous year, but poor equity markets in recent months do not bode well for another improvement in 2008, according to a Segal Co. report.
Multiemployer plans fully funded for vested benefits, thus without a withdrawal liability, rose to 17% from 14% the previous year, the report said.
Withdrawal liability funded ratio measures the percentage of funding of vested benefits. Employers withdrawing from the plans have to pay a liability to the plans whose assets fall below the present value of the vested benefits.
Funding improved through a combination of favorable investment performance and interest rates, Mary L. Feldman, senior vice president and director of public affairs, said in an interview.
For the study, Segal examined 402 plans across a range of industries with a combined $152 billion in assets, from seven plans each with less than $5 million in assets to eight plans with more than $4 billion each.