Moody's Investors Service is adding to the darkening clouds over the financial health of the nation's multiemployer pension plans.

The financial group issued a report on July 13 that examined 124 multiemployer pension plans, and found that investment returns boosted plan assets by 4.5 percent to $302 billion in 2014 - however, pension payout obligations that year rose 5 percent to $639 billion. The numbers show that the multiemployer plans, which include union construction pensions - were short of being fully funded by $337 billion at the end of 2014.

This report, says The Association of Union Constructors, comes on the heels of two reports issued in June by the Pension Benefit Guaranty Corp. (PBGC) which found:

(1) Ten to 15 percent of multiemployer plans are at risk of becoming insolvent over the next 20 years, threatening the retirement benefits of 1 to 1.5 million participants; and

(2) The PBGC is expected to run out of resources prior to 2025. The PBGC, which is the woefully underfunded financial backstop for failing pension plans, concluded that a substantial premium increase will be necessary to avoid cuts in multiemployer insurance program guarantees.

TAUC said they and their construction trade association and union partners "continue to meet with members of Congress and their staff to warn them of the impact of significant premium increases and need for congressional action to authorize the use of hybrid composite plans." Such plans, under one scenario, would allow the mingling of pension plans with 401k plans in order to help stop the bleeding in the entire system.

The Teamsters Central States Pension Plan has so far been the poster child for woeful multiemployer pension plans, but a building trades local union plan is now getting attention for being in similarly tough shape. The TAUC said that on June 28, the pension fund of the Bricklayers & Allied Craftsmen Local No. 7 Pension Plan, based in Akron, Ohio, filed a rescue plan with the Treasury Department. The Treasury Department has yet to approve a pension fund's application file under the provisions of the 2014 Multiemployer Pension Reform Act (MPRA). The Bricklayer & Allied Craftsmen's Pension Plan will become insolvent in 2025 unless it reduces benefits.

“The current Pension Plan has $15 million and is paying out $3 million every year,” it has told its members in a webpage. “It will run out of money sooner than you think – possibly in as little as 10 years. Failing to approve the Rescue Plan puts a majority of those receiving or eligible to receive their pensions at a risk for dramatic cuts far greater than what the trustees have proposed.”

The "Rescue Plan" proposed by Local 7 compares the benefit of a typical bricklayer who retires early and currently earns a $3,300 per month benefit. The Local 7 pension plan's rescue plan would cut that worker's benefit to $1,216 per month, compared to the last resort PBGC minimum guarantee of $1,072 per month.

Administrators of the Akron Bricklayers plan explained how their fund got in that underfunded condition, through "a combination of a volatile economy, a declining housing market, fewer active union brothers and sisters and poor government oversight have led the Pension Plan to approach insolvency." Administrators said a federal law, which has since been changed, required pension plans to distribute extra benefits if the plan was fully funded, not allowing for the creation of a rainy day fund.