Multiemployer pension plans offer advantages to employers and workers

Multiemployer pension plans are maintained under collective bargaining agreements between employers and unions and typically cover employees in the same or similar industries.

The plans, governed by a board of trustees who represent employees and management, have advantages for both sides.

For employers, joining a multiemployer plan means the organization doesn't have to devote resources to set up and administer its own pension plan.

For employees, the plans offer benefit portability. If an employee leaves an employer and joins another employer contributing to the plan, the employee retains all service credits.

There is one big disadvantage, though, for employers that leave an underfunded plan: A 1980 law requires them to pay a share of the plan's promised but unfunded benefits, a potential financial bite that has deterred employers from joining underfunded plans, experts say.

Plan demographics have changed dramatically as employers have left the plans, with their employees continuing as participants. In 1980, more than 75% of plan participants were active employees, according to the Pension Benefit Guaranty Corp.

In 2011, the most recent data available, just 38% of participants were employees, with the rest being either retirees collecting benefits or former employees who were vested but not eligible to receive benefits.