The aggregate funded percentage of all U.S. multi-employer defined benefit pension plans reached 97 per cent as at Dec. 31, 2024, an increase from 89 per cent a year prior, according to a new report from consulting firm Milliman Inc.
The report, which analyzes the funded status of all U.S. multi-employer DB plans through their latest Form 5500 filings, found the increase was attributable to an estimated 10 per cent investment gains on an assumed portfolio and special financial assistance under the American Rescue Plan Act.
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The report said 102 plans had received nearly US$70 billion in SFA funding at the end of 2024, with $16 billion paid last year. If this funding wasn’t available, the aggregate funded percentage of the plans reviewed would be about 89 per cent at the end of 2024.
Out of the nearly 1,200 plans’ funding reviewed more closely, more than half (53 per cent) are 100 per cent funded or more while 84 per cent of plans are 80 per cent funded or better. On the other hand, only seven per cent of plans are seeing a funded level below 60 per cent and may be headed toward insolvency, the report said.
In a press release, Tim Connor, co-author of Milliman’s multi-employer pension funding study, said they’re seeing more than half of all plans funded 100 per cent or better as part of an ongoing trend of upward improvement in funded percentage.
“Strong returns during the first and third quarters of 2024 largely drove the year’s significant rise in the aggregate funded percentage, which reached the second-highest point since Milliman launched this study in 2007.”
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