Market Troubles Hit Multiemployer Plans Hard

January 28, 2010 (PLANSPONSOR.com) – A new Segal Company report shows a deterioration in the funding status of more than 360 multiemployer client plans between 2008 and 2009 due to the meltdown in the investment markets.

Based on 2009 funding status classifications called for under the Pension Protection Act (PPA), the Segal report said 32% were certified under the PPA as in “endangered status” (the “yellow zone”) while 30% were in “critical status” (the “red zone”), and 38% not in either of the other two categories (the “green zone”).

That compares to 2008 when 11% were in the yellow zone, 9% in red and 80% in green, Segal said.

The report said the average PPA funded status for the surveyed plans was 82% in 2009, down from 93% the year before.

According to Segal, the 2009 status of the client plans differed according to industry. For example, more than half of the surveyed plans in the entertainment industry were in the green zone, while 14% were in the red zone. The experience in the retail trade and food industry was very different as more than half were in the red zone, Segal said.  

The Segal report is available here.   

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