Moody’s has issued a “credit negative” warning for sponsors of multiemployer pension plans, in light of the $10 billion increase in the Pension Benefit Guaranty Corps.’ multiemployer insurance program’s projected deficit.

While not a universal downgrade, the warning suggests that the inevitability of yet further increases in sponsors’ premiums to PBGC will affect the credit worthiness of some companies.

In PBGC's fiscal year 2015 annual report, released in November, PBGC said the multiemployer insurance program, which partially backs the pension promises to roughly 10 million participants in collectively bargained multiemployer pension programs, now has a deficit of $52.3 billion.

That is up from the $42.4 billion projection last year, and a new all-time high. The multiemployer program now has about $54 billion in net liabilities, matched with only $2 billion in net assets.

Most of those liabilities are accounted for by 38 plans that are expected to suffer more than $50 billion in liabilities. PBGC says 55 plans are currently receiving more than $1.6 billion in assistance.

As the program’s deficits have mounted, premiums have ballooned, notes Moody’s report. Premiums have risen by a compound annual rate of 16 percent to $27 per plan participant, up from $8 per participant in 2007.

That per-participant rate translates to about $270 million in annual premium revenue, a drop in the bucket relative to expected liabilities, and a clear indication to Moody’s analysts that premiums will continue to go up.

“Given the size of the deficit, such premiums will almost inevitably go up, quite possibly to unaffordable amounts, which will be a credit negative for sponsoring companies,” according to Moody’s report.

Eventually, premium increases will hit an inflection point where sponsors will not be able to afford premiums, and the PBGC’s multiemployer insurance program will run out of money. Moody’s cites PBGC’s own estimates, which say the program has a greater than 50 percent chance of being insolvent by 2025, and a 90 percent chance by 2031.

The Multiemployer Pension Reform Act of 2014 gave the most critically underfunded plans the ability to reduce existing pension promises to participants and some retirees, an unprecedented and highly controversial measure.

To date, one multiemployer plan, the Central States plan, has begun the process of applying for benefit reductions, which is overseen by the Treasury Department.

The Central States plan has about $18.7 billion in assets to pay for about $48 billion in pension obligations, a funded ratio that amounts to 39.1 percent, according to Moody’s data.

While only the Central States plan has begun the process of reducing pension benefits with Treasury, 12 other multiemployer plans have a funding level as low, or lower, than the Central States plan.

The Carpenters Pension Trust Fund  (Detroit and Vicinity) has $718 million in assets to pay for about $3.1 billion in liabilities, or a 23.3 percent funded ration; the New York State Teamsters Conference Pension & Retirement fund has $1.4 billion in assets to cover $5.1 billion in liabilities, or a 28.9 percent funded ratio; the New England Teamsters & Trucking Industry Pension fund has $4.2 billion in assets to cover $11.7 billion in liabilities, for a funded ratio of $35.6 percent.