According to the Segal Company poll of multi-employer plans to which it acts as a consultant, the healthy funding status came despite the fact that 68% of plans in the 2001 survey sweetened their benefits over the prior year.
Survey findings included that:
- The plans’ average funded ratio – the ratio of assets to vested benefits – was extremely high at 98%. This represented an increase of a percentage point over the previous survey.
- Plans with high average funded ratios were from a variety of industries with construction, transportation, entertainment, and retail plans at the 98% point or above.
- Plans ranging in size from fewer than 500 participants to 9,999 participants enjoyed the average funded ratios of 98% or above.
Funding Danger Signs?
The multi-employer plans may enjoy a healthy funding position now, but Segal researchers said that may not last.
As potential danger signs possibly foreshadowing a funding deterioration, Segal listed:
- poor investment performance because of the struggling equity markets,
- investment return estimates set by an actuary that exceed the plan’s actual experience, and
- the interest-rate drop
Segal’s 2001 Survey of the Funded Position of Multi-employer Plans includes 459 plans with combined assets of more than $142 billion covering more than 3.8 million participants.
View a copy of the survey .