For years, the gold standard for determining the financial stability of pension plans was their funding ratio, or the ratio of assets to liabilities. Conventional wisdom held that pension plans with assets sufficient to cover 80 percent or more of their liabilities were reasonably well-funded. But a pension plan’s funding ratio is just a snapshot at a point in time. To examine how multiemployer pension plans withstood the downturn, we have analyzed 88 of the largest multiemployer plans for which data are publicly available going back to 2005, before the Great Recession. The set of plans we evaluate include 69 percent of all participants in multiemployer plans, and they hold assets totaling 59 percent of all such pension assets.

Source: Forbes December 06, 2017 14:37 UTC