Most plans estimate liabilities based on a discount rate that accounts for the return on plan assets over the lifetime of the pension.

Under that method, unfunded liabilities declined 16 percent between 2013 and 2014, from about $162 billion to $136 billion.

But when applying a discount rate based on Treasury rates, or the Current Liability Basis prescribed by the IRS, liabilities are much greater, and the overall improvement considerably lower.

Under the Current Liability method, unfunded liabilities declined from $513 billion in 2013 to $495 billion in 2014.

Nearly every multiemployer plan carries an unfunded liability when applying the Current Liability method, the report says.

When using the discount rate that applies future returns on plans assets, the aggregate funding level for the plans was 76 percent in 2014. Under the Current Liability Rate, funded status drops to 53 percent.

According to SOA, the multiemployer plan system “carries significant unfunded liabilities, regardless of the assumptions and methods used to measure them.”

Beyond unfunded liabilities, multiemployer plans continue to be dogged by increasing dependency ratios, or the number of inactive participants drawing benefits from plans to the number of active participants contributing to plans.

The number of total inactive participants has steadily increased since 2001, when there were 1.02 inactive participants for every active participant. By 2014, there were 1.75 inactive participants for every active participant.

For an increasing number of the approximately 10 million participants in multiemployer plans, unfavorable demographics present an existential threat to future plan solvency.

In 2001, only 10 percent of participants were in a plan with a dependency ratio of 2.0 or greater.

By 2014, 10 percent of participants were in a plan with a dependency ratio of 5.0 or greater, and 30 percent of participants were in a plan with a solvency ratio of 2.0 or more.

While plan liability estimates account for the pension obligations to both retirees and active plan participants, employers typically base their contribution rates on the hours worked by active participants.

For plans with more inactive participants, and a higher dependency ratio, employers may be calculating unsustainably low contribution rates, the report says.

Aggregate contributions to the plans increased an average of 7.1 percent per year between 2009 and 2014, and exceeded the statutorily required minimum contributions during that time.

But that progress is erased when applying the more conservative Current Liability discount rate favored by the IRS. Under that method, the increases in contributions were not enough to maintain the aggregate level of unfunded liabilities in 2014, according to SOA.