Multiemployer pension plans were on average 82% funded in 2009, down from 93% in 2008, according to a Segal report.
The findings, released Jan. 28, are based on Segal data from November of more than 360 multiemployer client plans and use the funding measure of the Pension Protection Act of 2006.
Some 30% of the plans were in so-called red-zone status, or “critical status,” of an emerging funding problem requiring trustees and bargaining parties in collective labor agreement “to take specific actions to improve the plan’s financial (position),” the report said. That number is up from 9% in 2008.
About 32% of the plans were in yellow-zone status, or “endangered status,” also indicating an emerging funding problem. That number is up from 11% in 2008.
Only 38% of the plans were in green-zone status, down from 80% in 2008.
The drop in the average funding level of the plans and the “significant change in zone status from 2008 to 2009 is directly related to the investment meltdown that occurred in 2008 and carried over into the first quarter of 2009,” the report said. “Even if the investment markets continue to show relatively strong performance (since the rebound in 2009), it could take a long time for plans to recoup the dramatic investment losses.”