Report Points to Resilience in Multiemployer Defined Benefit Pension System

The construction industry’s multiemployer defined benefit pension system is showing signs of resilience, according to the recently revised Inventory of Construction Industry Pension Plans, MCAA and Horizon Actuarial Services’ groundbreaking analysis of historical trends in pension plans’ key operating data. Roughly 75% of all construction industry multiemployer plans are projected to be fully funded within 15 years according to the inventory, which is based on the annual reports (Form 5500) filed with the Labor and Treasury Departments for Plan Years 2006 through 2015.

Horizon Actuarial’s Cary Franklin, principal author of the report, notes that “plan resilience is the hallmark of the jointly sponsored construction industry plans,” which represent some 55% of all multiemployer plans nationally. Franklin also noted that the new data shows improved median plan funding status, reaching 82% in 2015, and modest growth in active participants in construction plans in years after 2011, all “modestly positive trends.”

“The 10-year data trends reflect the sound work plan trustees and bargaining parties continue to do to make sure the plan participants have good, hard-earned lifetime benefits they can rely on,” Franklin said, concluding that “labor and management plan trustees would benefit further if Congress would enact new options for plans to consider to help keep the system sustainable on a long-term basis.”

MCAA President Mike Brandt noted that, “Cary Franklin and his associates at Horizon have done a remarkable job – again – in producing this one-of-a-kind MCAA industry service and analysis, which is designed to help labor and management trustees benchmark their plan performance, help MCAA employers meet their year-end accounting disclosure requirements, and just as importantly – to guide national policy makers in enacting sound public policy decisions to allow plan trustees new options to improve the sustainability of the plans for the benefit of both employees and their families and their employers.”

“While the Fifth Edition of the Inventory shows some signs of steady improvement given the market rebounds since the 2008 Great Recession,” Brandt said, he cautioned that “there still is much underlying data in the Inventory underscoring the imperative need for deliberate legislative action – enacting the GROW Act H.R. 4997 – to give plan trustees more options and flexibility to keep these valuable benefits on a stronger and sustainable basis going into the indefinite future.”