U.S. Multiemployer Pension Plan Contribution Indices

Contribution indices are metrics for measuring whether pension plan contributions paid down unfunded liabilities or met other benchmarks, such as regulatory requirements. The SOA is pleased to make available a longitudinal study of multiemployer plan contribution indices in the U.S.

Highlights from the most recent update:

  • In 2015, more plans received sufficient contributions to maintain their unfunded liabilities as measured with funding discount rates—78% in 2015 compared with 76% in 2014. Also, more plans met a 15-year funding pace—55% in 2015, up from 50% in 2014. Preliminary results for 2016 indicate fewer plans meeting these benchmarks, in part because unfunded liabilities increased in 2016 because of lower-than-expected investment returns during 2015.
  • Although about 85% of plans received more contributions for 2015 than required by federal law, 22% of plans received insufficient contributions to maintain existing unfunded liabilities computed on the same basis, down from about 26% for 2014. This occurs primarily because regulations reduce the minimum required contribution by the “Credit Balance,” a mechanism for recognizing that a plan’s past contributions were more than the minimum required.1
  • For the second consecutive year, aggregate contributions met the benchmark for eliminating unfunded liabilities within 15 years when using funding-basis discount rates. However, when using Current Liability discount rates, contributions continue to fall significantly short of the level needed to maintain existing unfunded liabilities.
  • Aggregate unfunded liabilities increased slightly from about $129 billion for 2014 to about $133 billion for 2015, when measured with the actuarial discount rates, cost and asset methods used for funding purposes. Most plans continued to have an unfunded liability on this funding basis. Using Current Liabilities, which are computed with much lower discount rates that vary from year to year, unfunded liabilities increased from $496 billion in 2014 to $535 billion in 2015. Note that Current Liability discount rates were slightly lower for 2015 than for 2014, generally causing liabilities to increase slightly.


January 2018 Update

January 2017 Update

May 2016 Report

Thank You

The authors thank the following volunteers for their thoughtful arm’s-length review of the most recent study update prior to publication. Any opinions expressed may not reflect their opinions or those of their employers. Any errors belong to the authors alone.

Christian E. Benjaminson, FSA, EA, FCA, MAAA
James B. Dexter, FSA, EA, FCA, MAAA
Paul B. Dunlap, FSA, EA, FCA, MAAA

Questions or Comments?

If you have comments or questions, please email research@soa.org.

1 Internal Revenue Code §§431-432 and accompanying regulations set forth funding requirements for multiemployer pension plans.