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."