A cycle of relative instability in the nation's multi-employer pension plans - a category which covers all the building trades unions - may be drawing to a close.

A report released Feb. 27 by the Segal Co., the "2006 Survey of the Funded Position of Multi-employer Plans," found that the "average withdrawal liability funded ratio of multi-employer pension plans has stabilized following several years of decline."

That's accountant-speak for "good news." But according to John Tesija, a funds attorney for a dozen Michigan-based pension plans, some international and individual local-union-based plans are still going to be faced with "belt-tightening," especially in the wake of softening contributions to funds brought on by lower work hours.

Overall, the study found that multi-employer plans on average were 98 percent funded as recently as 2001, a number which dipped to 80 percent by 2005. With information not yet compiled for 2006, that number was projected to increase to 88 percent by the end of last year.

The uptick in the stock market is the primary reason for the increase in funding levels, said a Segal vice president. Tesija agreed.

"When stock market returns go up, the funding in the plans usually improve," Tesija said. "But of course the other critical component is hours worked. There are a lot of building trades plans that haven't quite turned the corner yet, primarily because of the lack of work opportunities."

Tesija said multi-employer plans haven't been in nearly as much financial trouble as single-employer pension plans like those of some bankrupt steelmakers or airlines, "but they may need to be doing some belt-tightening in the short term to reflect Pension Protection Act guidelines."

The Pension Protection Act adopted by Congress last year will impose stringent investment and benefit rules on pension plans that drop below certain funding levels, to make sure that they don't drop even further or require a federal bailout.

"The study shows that plans are moving into the high-80 percent funding area, and that's good," Tesija said. "I think it shows that if they're funded and managed properly, multi-employer defined benefit plans are here to stay and will continue to do what they're designed to do: provide a good retirement for workers."