Multiemployer pension plans stabilized their funded status on average in 2009, according to a new Segal Co. report, examining 227 plans whose fiscal year ended Dec. 31.
In all, 54% of the plans were certified this year as in “green zone” status, a funding level characterized as neither endangered nor critical under the Pension Protection Act of 2006. That's up from 39% in 2009.
Some 16% were certified as in the “yellow zone,” considered endangered status for their ability to pay benefits, down from 29% last year.
Plans in the “red zone,” characterized as in critical funded status, fell to 30% from 32%.
The color zones don't correlate to particular funding ranges, Marc Hopkins, spokesman for the Pension Benefit Guaranty Corp., said in an interview.
“While much of the improvement is doubtless due to investment gains flowing from the recovering investment markets, we know that many boards of trustees, unions and employer groups worked hard during the past year on plan design and funding changes that would help stabilize their plans' financial status,” Joseph A. LoCicero, Segal president and CEO, said in a statement about the findings.
“We are certainly glad that this much progress has been made, but note that the multiemployer community is still facing formidable funding challenges as a result not only of the 2008 market slump but also the impact of the current recession on the health of the industries that support the plans. The fact that 83% of calendar-year plans were in the green zone in 2008, before the market downturn and recession, underscores how far multiemployer plans still need to go. We are looking forward to getting funding relief from Congress that will ease the path to general recovery.”
