CAWP News 8-10
Number of Green-Zone Multiemployer Pension Plans up from 2009 but Still Down From 2008
CAWP contractors contribute money into union pension plans on behalf of their union employees. These funds are called multiemployer defined benefit pension plans – “multiemployer” since several different employers contribute to one plan. This type of plan relies on contributions from employers and investment income to provide the retirement benefit, and is administered by employer and union trustees.
A national report released by the Segal Company found the number of multiemployer pension plans in the green zone as of January 1, 2010, was significantly higher than that a year earlier. The Survey of Calendar-Year Plans' 2010 Zone Status found that 54 percent of the 230 calendar-year plans surveyed – which are Segal clients from a variety of industries – are certified in the green zone for 2010. This is a 15 percent increase from the 39 percent found last year, but still well below the 83 percent found in 2008. The survey found little change in the percentage for red-zone plans, which is now much higher than the percentage of yellow-zone plans.
The survey included 121 plans in the construction industry. Of those, 59 percent were in the green zone at the start of 2010, 20 percent were in the yellow zone, and 21 percent were in the red zone. This compares to 43 percent, 33 percent, and 24 percent in 2009, respectively.
The survey also found that the average funded percentage for all calendar-year plans surveyed was 86 percent as of January 1, 2010, an increase of only one percent from a year earlier and significantly lower than the 97 percent found in 2008.
Just over 100 of the surveyed plans – about 75 percent of those eligible – exercised the option provided by the Worker, Retiree and Employer Recovery Act of 2008 to freeze the plan’s 2009 zone status at its 2008 level. Nearly 30 of those plans (over 25 percent) are in the green zone for 2010.
For an abstract of the report, click here
To help in the effort by contacting your congressional delegation for support, click here.