Milliman, a consulting and actuarial firm, recently published its yearly Multiemployer Pension Funding Study for 2020, which looks at the funding status of all multiemployer pension plans in the United States. The report notes that the aggregate funded percentage of all multiemployer plans increased to 88% at the end of 2020, compared to 85% in 2019. This is the highest percentage since 2007. Approximately 80% of plans are at least 80% funded. Half of all plans are at least 100% funded. Ten percent of plans are below 60% funded and are at risk of insolvency.
While 2020 was characterized by a volatile market and economic downturn, most plans experienced a strong investment return above expectations which increased overall funding. The report notes, however, that the analysis does not yet reflect the impact of COVID-19’s effect on plan participation and contribution levels. Plans representing industries that have been heavily affected by the pandemic, such as entertainment, may experience a downturn in the future.