The number of multiemployer pensions in critical status has fallen for the sixth straight year.

The number of US multiemployer pension plans in critical status has declined for the sixth straight year, and has fallen to its lowest level since 2008, according to data from the US Department of Labor.

Under federal pension law, if a multiemployer pension plan is determined to be in critical status or endangered status, the plan must provide notice to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corp. (PBGC), and the Department of Labor.

In 2018, there were 115 multiemployer pension plans that reported to the Department of Labor that they were in critical status, which is less than half of the number that reported that status just six years ago. That is compared to 127 in 2017, 171 in 2016, 175 in 2015, 220 in 2014, 235 in 2013, and 241 in 2012. It was also the lowest number of plans in critical status since 2008, when 102 multiemployer pension plans reported they were in critical status.

Meanwhile, the number of plans in critical and declining status fell by 30% over the past year to 56 from 80 in 2017, and the number of plans in endangered status fell 31% to 59 from 85 in 2017. The number of endangered plans has been cut by more than half since 2014, when 120 plans reported being in that status.

If a plan is in critical status, adjustable benefits may be reduced and no lump sum distributions in excess of $5,000 can be made. If a critical status plan is also critical and declining, the plan sponsor may file an application with the Secretary of the Treasury requesting a temporary or permanent reduction of benefits to keep the plan from running out of money.  Pension plans in critical and endangered status are required to adopt a plan aimed at restoring the financial health of the pension plan. 

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