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Once you know your specific plan’s Funding Percentage, your plan can be classified as one of the following:

OVERCAST: Some Pension Risk

Here are some ERISA notices you might receive if your plan is at some risk:

1. ERISA § 101(f) Notice. In general, funding of less than 100% but more than 60% indicates your plan has at least some risk. Your annual 101(f) Notice may also contain other information which may indicate your plan’s forecast should be downgraded to Overcast. Such information includes: (1) the ratio of plan assets to payments; (2) summary of rules governing insolvent MEPs; and (3) the limits of Pension Benefit Guarantee Corporation (PBGC) guarantees.

2. ERISA § 4011 Notice. In general, plans which are underfunded must pay a “variable rate premium” to the PBGC pursuant to ERISA Section 4006(a)(3). If your Single Employer Plan must make such a payment it must issue a “4011” notice to plan participants. This notice must disclose the actual funded status and explain the limitations of PBGC guarantees if the plan were to terminate while underfunded.

3. ERISA § 204(h) Notice. Your plan administrator must send you a “203(h) notice” whenever any amendment is adopted that reduces future benefit accruals. If a 204(h) notice is given, further investigation is warranted. Generally, plans do not like to cut benefits, so a willingness to do so can be a red flag that indicates trouble ahead