Pension plans for 1.5M on shaky ground
WASHINGTON — Despite an improving economy, retirement plans covering about 1.5 million workers are severely underfunded, threatening benefit cuts for retirees, a federal watchdog agency warned on Monday.
The Pension Benefit Guaranty Corporation said multi-employer plans, which are collectively bargained retirement plans maintained by more than one employer, are most at risk. “Plan insolvencies ... are now both more likely and more imminent than in our last report,” the report said.
At the same time, the agency said single-employer pension plans — covering just more than 30 million participants — are on firmer financial footing and are likely to remain so at least during the next 10 years.
The report concluded that the outlook is slightly better than it was a year ago as the nation's economy gradually improves from the severe 2007-09 recession.
“In the past year, economic conditions have improved significantly, and most plans are projected to remain solvent,” said the agency, which was established under the Employee Retirement Income Security Act of 1974.
But, it added, that research during the past year had made clear that, for some multi-employer plans, “even the improving economy will not be sufficient to maintain their solvency.”