Reports and Surveys | August 20, 2024

2024 Survey: Improved Multiemployer Pension Plan Zone Status

For most investors, including multiemployer pension plans, 2023 was a good year. The median 2023 investment return for multiemployer pension plans in our latest survey was 11.1 percent.

That strong investment performance enabled plans to recover some of the money they lost in 2022’s challenging market when the median loss was -11.9 percent. Favorable 2023 investment returns also contributed to improvements in zone status for 2024.

From 2023 to 2024, there was a slight uptick in the percentage of plans in the green zone, resulting in 75 percent of plans being “green” as of January 1, 2024.

Moreover, the funded percentage for determining zone status under the Pension Protection Act of 2006 averaged 93 percent as of January 1, 2024, up a point since 2023.

Our survey presents many more statistics about multiemployer pension plans, including information for these industries: construction, entertainment, manufacturing, retail and food, service and transportation.

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What you’ll find in this survey — and why you should care

For trustees of multiemployer pension funds, there’s no greater challenge than navigating your plan through volatile periods. Knowing the details of how similarly situated plans have performed can provide a benchmark for your own plan’s performance.

The survey includes the most current data available from “zone-status” certifications for which Segal is the actuary, of nearly 190 calendar-year plans that were filed by March 30, 2024. As a group, these plans have more than $180 billion in assets and provide benefits to over 2.7 million participants and beneficiaries.

This data, combined with the insight we’ve developed from decades of working with multiemployer pension plans, makes this report an invaluable tool for trustees.

You’ll learn:

  • The range of annual investment returns, grouped by percentiles, from 2021 through 2023
  • How investment volatility has affected zone status from 2021 to 2024
  • Impact due to plans that received Special Financial Assistance (SFA) under the American Rescue Plan Act in 2022–2024
  • Changes in market value and PPA funded percentages due to 2023 investment returns
  • The impact of asset smoothing on the PPA funded percentage
  • The importance of monitoring plan maturity, which can be evaluated through metrics such as the “burn rate” or the ratio of inactive participants to active participants
  • How plan maturity and zone status vary by industry
  • The percentage of plans in the survey in the green zone that improved benefits in 2023 and the type of improvement
  • Looking ahead, what changes we can expect and how plans can mitigate risks

Seeking trusted advice?

We understand multiemployer plans, having worked with hundreds of them for decades. That experience helps us provide innovative, cost-effective solutions to the challenges funds face. Our unbiased, objective advice allows funds to make decisions in the broader context of other multiemployer plans. Moreover, our ability to aggregate multiemployer data from our extensive client base enables us to determine trends and offer timely advice on emerging developments.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.