Multiemployer Funding Picture Brightening

A Segal news release said its 2010 study found 16% are in the “yellow zone” (down from 29% the year before), and 30% are in the “red zone,” a slight improvement over the 32% in the 2009 study (Market Troubles Hit Multiemployer Plans).   

“While much of the improvement is doubtless due to investment gains flowing from the recovering investment markets, we know that many Boards of Trustees, unions and employer groups worked hard during the past year on plan design and funding changes that would help stabilize their plans’ financial status,” Joseph A. LoCicero, President & CEO of The Segal Company said in the news release. “We are certainly glad that this much progress has been made, but note that the multiemployer community is still facing formidable funding challenges as a result not only of the 2008 market slump but also the impact of the current recession on the health of the industries that support the plans.”

Segal said the 2010 report will be available this spring. The previous report is at http://www.segalco.com/publications/surveysandstudies/winter2010zonestatus2009.pdf.

Under the 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.