U.S. multiemployer pension plans were underfunded by an estimated $211 billion in 2009, amounting to an average 54% funding ratio, according to a Moody’s Investors Service report.
The numbers compare to estimated underfunding of $165 billion, with a 56% funding ratio, in 2008. In 2007, multiemployer plans were underfunded by an estimated $87 billion, with a 77% funding ratio.
Multiemployer plans remained underfunded despite strong investment returns in 2009 because of lower discount rates, the report noted. If these plans remain underfunded, the sponsor companies might have to make larger contributions to cover “a major part of the deficiency,” the report stated.