Archived Insight | February 9, 2021

Pension Plan Zone Status: Winter 2021 Multiemployer Survey

The economic impact of COVID-19 affected the multiemployer pension plans in our latest survey, which covers plans with plan years that begin from February 1, 2020 through July 1, 2020. These findings reflect the short-term economic impact of the COVID-19 pandemic on financial markets and employment levels. Market values have fluctuated during the COVID-19 pandemic, with dramatic declines through April 30, and increases during May and June.

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Key findings

When compared with the prior year, we discovered the following about the plans in the survey:

  • The number of plans with a projected minimum funding deficiency within the next 10 years grew by almost 25 percent.
  • The percentage of plans in the green zone remained level.
  • The average funded percentage was 84 percent, down slightly from 85 percent in 2019.
  • The industry activity assumption for most plans was the same or close to the same as in their prior year’s zone certification.

What you’ll find in this survey — and why you should care

For trustees of multiemployer pension funds, there’s no greater challenge than navigating your plan through the current funding crisis. Knowing the details of how plans similar to yours have performed can provide a benchmark for your own plan’s performance. This data, combined with the insight we’ve developed from decades of working with multiemployer pension plans, makes this report an invaluable tool for trustees.

This report includes (but is not limited to) insights on:

  • The effect of asset smoothing on funding status
  • Different industry activity assumptions
  • What factors have influenced changes in plan funding status
  • The importance of risk to plan funding
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Have questions?

The issues surrounding multiemployer pensions are evolving. If you would like to discuss challenges facing your plan, contact us and one of our consultants will reach out to you.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.