Funded percentage of multiemployer pension plans rebounds to 82% in first half of 2019

Milliman today released the results of its Fall 2019 Multiemployer Pension Funding Study (MPFS), which analyzes the funded status of all multiemployer pension plans in the United States. Between January 1 and June 30 of 2019, the aggregate funded ratio of multiemployer plans rose from 74% to 82% thanks to stellar asset gains for many of these plans. In fact, the estimated investment return for the MPFS was about 13.4% for the first six months of 2019, nearly double many plans’ annual investment return assumptions.

Over the first six months of 2019, the number of multiemployer plans that are 90% funded or better, climbed from 383 to 635—a 66% increase. However, for troubled plans, such as those in critical or critical and declining status, the rebound in funded status is not as pronounced despite the positive investment returns. This is primarily due to their maturity and negative cash flow positions.

The majority of multiemployer pensions had a great start to 2019, with many reaching pre-2008 funding levels. Troubled plans, however, have struggled to rebound fully, and may need to depend on legislation making its way through Congress to help fund their members’ pensions.

To view the complete study, click here.

To receive regular updates of Milliman’s pension funding analysis, contact us here.