Nearly three-quarters of multiemployer pension plans were less than 80% funded as of August, according to a survey by the International Foundation of Employee Benefit Plans.

The findings demonstrate the toll that the economic crisis has taken on the plans in the past year, said Julie Stich, senior information/research specialist at the IFEBP in Brookfield, Wis.

“The number of plans reporting an endangered or critical status has almost tripled” in the past year, Ms. Stich said in a statement. “These plans must now decide between taking immediate steps to improve their funding or taking the one-year funding status freeze.”

The Pension Protection Act of 2006 requires multiemployer defined benefit plans to certify their funding status each year. A plan is considered “safe” if it is at least 80% funded. Plans less than 65% funded are considered to be “critical.” Plans that fall between the two funding levels are considered to be either “endangered” or “seriously endangered.”

In 2008, 75% of survey respondents reported their plans were “safe,” 14% were “endangered” or “seriously endangered,” and 11% reported being in “critical” status. This year, only 27% reported having a “safe” status, while 36% are “endangered” or “seriously endangered,” and 37% are in “critical” status.

Under the PPA, plans certified as “endangered” must devise a funding improvement plan, and those certified as “critical” must devise a rehabilitation plan. To provide relief for defined benefit plans, the Worker, Retiree and Employer Recovery Act of 2008 provides an alternative option: freezing the funding status temporarily.

Slightly more than half of the 213 plans responding to this year’s IFEBP survey say they are taking advantage of the temporary freeze option.

“Multiemployer Pension Funding Status and the Freeze Decision” (Item #6740E) is available to foundation members at no cost. Nonmembers can purchase the survey for $50. To order, visit www.ifebp.org or contact the foundation’s bookstore at bookstore@ifebp.org or (888) 334-3327, option 4.