The overall health of multiemployer defined contribution (DC) retirement plans improved from 2021 to 2023. According to The Multiemployer Retirement Plan Landscape: A 15-Year Look (2009-2023), recently released by the International Foundation of Employee Benefit Plans, the average account balance for a participant in a median multiemployer DC plan dipped slightly from $52,500 at the end of 2021 to $52,100 at the end of 2023. The small decline was due to investment losses in 2022 that largely rebounded in 2023.
Plans in the Study
The report analyzed Form 5500 data submitted by 1,021 multiemployer DC retirement plans with asset values greater than zero. These plans held approximately $236 billion in assets and covered approximately 5.1 million participants and beneficiaries. By comparison, in 2021, there were 1,049 multiemployer DC plans covering about 4.6 million participants.
Plan Types
Total retirement income is often described as a three-legged stool consisting of a pension from a defined benefit (DB) plan, savings or a DC retirement plan, and Social Security. Of the 1,021 multiemployer DC plans in the study, it was determined that 800 plans (78%) were associated with an ongoing multiemployer DB plan. Another 168 plans (17%) appeared to be standalone DC plans, while for 53 plans (5%), a definitive determination could not be made. On an industry-by-industry basis, the construction and transportation industries had a smaller share of standalone DC plans compared to other industries.
The most popular type of multiemployer DC plan was money purchase plans (34%), followed closely by profit-sharing plans (33%) and 401(k) plans (27%). The remaining 6% of plans either did not specify a plan type or indicated they were a target benefit, offset or 403(b) plan.
Plan Funding
In DC plans, contributions can be made by employers, participants or both. Roughly 27% of the plans in the study (primarily 401(k) plans) allowed participant contributions. In 2023, the aggregate contributions were $15.1 billion, up from $13.6 billion in 2021. The median contribution per participant also increased, rising from $3,900 in 2021 to $4,400 in 2023.
Plan Investments
Over the 15-year period in the study, the median annualized return for multiemployer DC plans was 7.4%. Median investment returns were positive in most years with exceptions in 2018 (-4.2%) and 2022 (-14.5%), and returns were close to zero in 2011 and 2015. Note that for many DC plans, participants—not plan trustees working with professional advisors—directed investment decisions.
More About Multiemployer Retirement Plans
The Multiemployer Retirement Plan Landscape: A 15-Year Look (2009-2023) is the eleventh multiemployer retirement plan benchmarking report produced in partnership with Horizon Actuarial Services, LLC, and the International Foundation of Employee Benefit Plans. This comprehensive report examines data from Form 5500 annual reports filed by multiemployer pension and retirement plans with the U.S. Department of Labor. Form 5500, as required by the Employee Retirement Income Security Act (ERISA), collects data filed by private-sector retirement plans on plan benefits, funding, investments and operations.
