This is a 10% increase from 2010 (see “Segal Encourages Multi-Employer Plans to Use Pension Funding Relief”). Segal says the increase is primarily attributable to Pension Relief Act 2010 elections (see “IRS Multi-Employer Funding Guidance not Perfect, but Still Useful”).
The survey found 13% of plans were in the yellow zone and 24% were in the red zone. Under the Pension Protection Act (PPA), the “yellow zone” represents endangered status, the “red zone” is critical status, and the “green zone” is for plans in neither of the other two categories.
The average PPA funded percentage for the surveyed plans was 87% in 2011, a four-percentage-point increase from 2010.
Many plans also benefited from strong investment performance that began in the latter half of 2009 and continued through 2010; however, the effects of the 2008 and early 2009 market losses continue to have an impact on plans’ zone status, Segal said.Complete findings of the survey are at http://www.segalco.com/publications/surveysandstudies/winter2012zonestatus2011.pdf.
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