Multiemployer pension plan funding varies widely

The average funded level of multiemployer pension plans was largely unchanged in 2014, but funding levels of individual plans varied significantly, according to a new survey.

On average, multiemployer plans were 80% funded last year, down slightly from 81% in 2013, but up from 72% in 2012 and 60% in 2008 when plan asset values plunged during the Great Recession..

In all, the plans in 2014 had $480 billion in assets, up from $473 billion in 2013, while liabilities increased to $597 billion from $585 billion.

Plan funding, though, varied widely. For example, 285 multiemployer plans of the nearly 1,300 surveyed, were more than 100% funded as of Dec. 31, 2014.

On the other hand, 201 plans were on average less than 65% funded with an aggregate deficit of $60 billion.

That low funded level of a slice of multiemployer plans triggered Congress last year to pass legislation allowing underfunded plans to cut benefits.

The new law allows participants' benefits to be cut if a plan is projected to become insolvent during a current plan year or any of the next 14 years, or any of the next 19 years if the plan's ratio of inactive participants to active participants exceeds 2-to-1 or if the plan is less than 80% funded.