Number of Endangered Multiemployer Plans Quadrupled in Last Year

April 28, 2009 (PLANSPONSOR.com) - A new survey from the International Foundation of Employee Benefit Plans (IFEBP) shows that the number of multiemployer pension plans less than 80% funded has quadrupled in the last year.

In 2008, 80% of multiemployer DB plans were certified as safe (in the green zone), while only 11% were endangered or seriously endangered (the yellow or orange zone), and 9% were critical (the red zone). For survey respondents who have calculated their plan status in 2009, only 20% remain in the safe zone, and the majority of plans were either endangered or seriously endangered (41%) or critical (38%), according to an IFEBP announcement.

In general, a plan is certified as safe (or in the green zone) if it is at least 80% funded and critical if it's less than 65% funded. Those plans that fall in between are considered endangered or seriously endangered, IFEBP explained.

"Multiemployer DB plans had seen some improved funding levels in the last couple of years, but the economic meltdown has taken its toll," said Julie Stich, Senior Information/Research Specialist at the IFEBP, in the announcement. "Unfortunately, more and more plans are facing a critical situation."