Reports and Surveys | April 12, 2022
While some multiemployer plans remain in critical red-zone status, most are not. In fact, the percentage of plans in the green zone has increased.
For an illustration of how the zone-status breakdown for plans in our latest survey improved between 2020 and 2021, see an infographic.
A series of measurements determine a plan’s zone status. The two primary factors are the funded percentage and maintenance of the funding standard account credit balance.
The funded percentage is a point-in-time measure. Since it uses the actuarial value of assets, it reflects only a portion of the market-value investment experience. However, projecting the funding standard account credit balance forward reflects the full impact of market-value returns.
To be in the green zone, a plan must have funded percentage of at least 80 percent, and a projected credit balance, rather than a funding deficiency, at the end of seven years, or ten years in some instances.
The 283 plans included in this survey are those with plan years that range from January 1 to July 1.
As a group, these plans have more than $215 billion in assets, provide benefits to just over 3.5 million participants and represent approximately one-third of all participants in multiemployer plans.
The 2021 zone-status certifications for the plans in the survey reflect investment performance before the current market volatility and geopolitical uncertainty.
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.
Don't miss out. Join 16,000 others who already get the latest insights from Segal.