Thanks to a combination of favorable investment experience, contribution increases, and benefit reductions, funding levels for multiemployer plans have nearly returned to pre-crash funding levels, at least on an aggregated basis. The significant improvement in aggregate funded status since early 2009 reflects not only favorable investment returns, but also contribution increases (including withdrawal liability collections) and benefit reductions enacted by plans as they responded to the financial crisis.

One common misconception is that plans should be back on their feet because the stock market has surpassed its levels from before the financial crisis. However, liabilities have been growing at 7.5% per year on average every year, so market prices would need to be about 50% higher today to have kept pace with liability growth.

The financial crisis has also affected individual plans in different ways. For more mature plans, for example, contributions become relatively small compared with the size of the plan’s assets and liabilities, and so contribution increases are less effective at improving the plan’s funded level.