Nearly Two-Thirds of Multiemployer Plans in Green Zone, Average Funded Percentage in High-80s

New York (12/9/15) —  Segal Consulting’s latest Survey of Plans’ Zone Status presents data for multiemployer pension plans with zone certification filing deadlines in the 12 months between October 1, 2014 and September 30, 2015. Key findings include:

  • Nearly two-thirds of plans (64 percent) are in the “green zone.”
  • The average funded percentage, initially defined by the Pension Protection Act of 2006, is 87 percent.
  • One-third of the red-zone plans were classified as “critical and declining.” The Multiemployer Pension Reform Act of 2014 provides additional corrective options for critical and declining plans, specifically the eligibility to apply for benefit suspensions and possible eligibility for partitions and Pension Benefit Guaranty Corporation financial assistance for mergers.
  • While 26 percent of plans are in the red zone, those plans account for 49 percent of plan participants.
  • The percentage of participants in plans in the red zone is greatest in the Transportation and Manufacturing. The percentage of participants in plans in the green zone is greatest in the Entertainment, Construction and Retail Trade & Food industries.

“It is encouraging to see that nearly two-thirds of plans have consistently been in the green zone over the past few years,” commented David Blumenstein, senior vice president and national director of multiemployer consulting. He also noted, “plans in critical and declining status cover 23 percent of the 3.8 million participants of the plans surveyed. Those plans are beginning to assess the applicability of the new tools afforded to them by the Multiemployer Pension Reform Act.”

Read the full report, which includes five charts.

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Segal Consulting (www.segalco.com), a member of The Segal Group, is a leading, independent firm of benefits, compensation and human resources consultants. In 2014, The Segal Group is celebrating the 75th anniversary of its founding by Martin E. Segal. Segal is headquartered in New York and has nearly 1,000 employees throughout the U.S. and in Canada. Clients include state and local governments, corporations, non-profit organizations, professional service firms and joint boards of trustees administering pension and health and welfare plans under the Taft-Hartley Act.

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