Multiemployer defined benefit pension plans are feeling the effects of the current economic recession, according to the International Foundation of Employee Benefit Plans, citing its survey showing that the majority of plans were either endangered or seriously endangered (41 percent) or critical (38 percent).

The Foundation says that in general, a plan is certified as safe (or in the “green zone”) if it is at least 80 percent funded and critical if it is less than 65 percent funded. Those plans that fall in between are considered endangered or seriously endangered. “[T]he economic meltdown has taken its toll,” says Foundation spokesperson Julie Stich. “Unfortunately, more and more plans are facing a critical situation.”

To provide relief, the Foundation says Congress recently passed the Worker, Retiree, and Employer Recovery Act of 2008 which offers multiemployer defined benefit plans the option of a one-year funding status freeze. The one-year freeze option allows plans certified as safe for the 2008 plan year, but now certified as endangered or critical, to freeze their safe status for the 2009 plan year. Likewise, plans certified as endangered for 2008 but critical for 2009 may freeze their endangered status. The Foundation says that “a large number” of plans will apparently take advantage of the freeze: “Of the responding DB plans that have decided whether or not to freeze their plan, the majority (60 percent) are opting to take the freeze.”