Orphan and Inactive 

Participants in 

Multiemployer Plans,

2015 Plan Year Reporting

August 2019 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Summary

This supplement to PBGC’s Data Tables examines and analyzes the data reported by 

multiemployer pension plans on participants whose employer has withdrawn from the plan.

These participants are often referred to as “orphan participants” in discussions regarding troubled 

multiemployer plans.

Plans with large populations of orphan participants may see an increased risk of failure. Orphan 

participants increase the overall size of the plan compared to its base of contributing employers; 

this increases the relative cost per contributor to restore plan funding if the plan suffers a loss.

Plans report data on participants whose most recent employer no longer contributes to the plan

on the Form 5500. Current orphan reporting does not appear to be robust across ongoing plans in 

the system. Only a minority of plans report any orphan participants at all, and a few plans report 

information that appears inconsistent with the instructions for reporting. 

Figure 1 - Orphan Reporting is not Robust Across the Universe of Ongoing Plans

 Source: Plan Year 2015 Form 5500 Filings, Excludes Terminated and Insolvent Plans

Orphan participants in the ongoing plans that reported plausible non-zero values for orphans 

totaled 1.6 million, which accounts for 24 percent of participants in those plans and 16 percent of 

the 10.3 million participants in all multiemployer plans. The estimated range for the total number 

of orphan participants (defined as participants whose most recent employer no longer contributes 

to the plan) is 1.6 million to 2.5 million participants, after adjusting for missing reporting.

Given the incomplete state of orphan reporting, the supplement also examines the ratio of 

inactive to active participants. The five industries with the highest reported concentration of 

orphans (Agriculture, Mining, Manufacturing, Transportation & Utilities, and Leisure & 

Hospitality) also report the highest ratio of inactive to active participants. Similarly, in plans in 

the most troubled funding zone statuses, there is a high concentration of both reported orphans 

and high inactive to active participant ratios.

796 Plans, Blank 

7 Plans, More orphan 

participants than inactive

108 Plans, Zero value 

345 Plans, Plausible nonzero value

2015 Plan Year, Orphan Reporting

(1,256 Ongoing Plans Reporting)
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Table of Contents

Summary.......................................................................................................................... i

Background ..................................................................................................................... 1

Multiemployer Plans ..................................................................................................................1

Pension Insurance and Regulatory Environment ......................................................................1

Plan Risks due to Employer Withdrawals..................................................................................2

Orphan Participants – Alternate Definitions ..............................................................................3

Reporting on Orphan Participants ................................................................................... 4

Data Source ..............................................................................................................................4

Data Anomalies .........................................................................................................................6

Plan Size .................................................................................................................................11

Estimating System-wide Numbers of Orphan Participants......................................................13

Historical Trends .....................................................................................................................14

Industry....................................................................................................................................16

Zone ........................................................................................................................................19

Reporting on Inactive Participants................................................................................. 22

Participant Status and Plan Zone Status.................................................................................23

Inactive to Active Participant Ratio..........................................................................................26

Conclusions................................................................................................................... 29
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Table of Figures

Figure 1 - Orphan Reporting is not Robust Across the Universe of Ongoing Plans ____________________ i

Figure 2 - Orphan Reporting in All Multiemployer Plans (2015) _________________________________ 7

Figure 3 - Anomalous Orphan Reporting in Terminated and Insolvent Plans (2015) _________________ 7

Figure 4 - Orphan Reporting in Ongoing Plans (2015)_________________________________________ 8

Figure 5 - Ongoing Plans Reporting Zero or Blank Orphans in 2015, by Reported Withdrawal History___ 9

Figure 6 - Orphan Reporting by Ongoing Small Plans (2015) __________________________________ 11

Figure 7 - Orphan Reporting by Ongoing Mid-Size Plans (2015) ________________________________ 11

Figure 8 - Orphan Reporting by Ongoing Large Plans (2015) __________________________________ 11

Figure 9 - Orphan Reporting by Plan Size, Ongoing Plans (2015) _______________________________ 12

Figure 10 - Historical Orphan Reporting by Largest Critical and Declining Plans ___________________ 14

Figure 11 - Changes in Reporting by Ongoing Plans (2010 & 2015) _____________________________ 15

Figure 12 - Orphan Participant Metrics in Ongoing Plans, by Industry (2015) _____________________ 17

Figure 13 - Orphan Participant Metrics by Plan Size, Within Zone Status (2015) ___________________ 21

Figure 14 - Likelihood that Orphan to Participant Ratio by Zone is due to Chance _________________ 22

Figure 15 - History of Participants by Plan Zone Status and Participant Status ____________________ 24

Figure 16 - Average Percentage of Inactive Participants Grows as Plan Zone Status Worsens ________ 25

Figure 17 - Likelihood that Inactive to Active Participant Ratio by Zone is due to Chance ____________ 26

Figure 18 - Plan, Participant and Orphan Counts, by Inactive/Active Ratio and Zone (2015) _________ 27

Figure 19 - Plan and Participant Distributions, by Inactive/Active Ratio and Zone (2015)____________ 28
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Background

Multiemployer Plans

A multiemployer plan is a pension plan created through collective bargaining agreements

between employers and a union. The employers are typically in the same or related industries, 

such as transportation, construction, and hospitality. Each employer contributes to the plan at an 

agreed upon rate to fund the aggregate plan liabilities. This contribution rate is typically reset, as 

needed, during subsequent collective bargaining negotiations. Contribution rates for most plans 

are set as a rate per hour worked or similar amount per measure of work inputs by active 

participants. 

Pension Insurance and Regulatory Environment

Congress established the Pension Benefit Guaranty Corporation (PBGC) through the Employee 

Retirement Income Security Act of 1974 (ERISA) to insure the defined benefit pensions of 

workers and retirees in private-sector pension plans. In 1980, under the Multiemployer Pension 

Plan Amendments Act of 1980, the insurance program for multiemployer plans was separated 

from that for other covered plans, leading to two PBGC guarantee programs with different levels 

of guarantees, premiums, and regulatory requirements. 

In the year 2000, both of these insurance programs had assets in excess of incurred claims.0F

1 But 

by 2002 the Single-employer Program entered deficit, followed in 2003 by the Multiemployer 

Program, as it became clear that pension plan failures would exceed the levels that were 

anticipated in the premium structure of the guarantee programs.

To improve economic security, the Pension Protection Act of 2006 (PPA) made significant 

changes to the regulatory requirements for both single-employer and multiemployer pension 

plans. Funding rules were materially changed for both single-employer and multiemployer plans, 

but in different ways, leading to a sharp divergence in the funding requirements for plans in these 

programs.

For multiemployer plans, PPA made modest changes to the funding rules which apply to all 

multiemployer plans. PPA also introduced the concept of a plan’s “zone status” based on specific 

metrics, which delineates plans and requires additional efforts from plans assessed as more 

troubled. In general, the zone statuses are assigned by looking at whether plans are likely to fail 

to meet minimum funding rules or become insolvent within the next few years (generally looking 

out seven or fewer years) or are less than 80 percent funded. Plans subject to the zone status rules 

are required to devise and disclose how they expect to improve funded status.

 1 2016 PBGC Databook Tables S-1 and M-1. https://www.pbgc.gov/sites/default/files/2016_pension_data_tables.pdf
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Enforcement of the minimum funding standards also changed significantly. Before PPA, an 

escalating excise tax on missed contributions effectively led plans to terminate prior to missing a 

required contribution. PPA effectively removed this incentive in most situations.

PPA also required new disclosures for multiemployer plans, including requiring plans to report 

more information about the structure and the stability of the group of employers that contribute 

to these plans and the numbers of participants whose employers have withdrawn from the plans.1F

2

Plan Risks due to Employer Withdrawals

Employers are permitted to withdraw from a multiemployer plan, typically by paying withdrawal 

liability to the plan based on the plan’s funding level at the time of the employer’s withdrawal. 

The withdrawing employer’s plan participants are still entitled to receive their accrued vested 

benefit from the plan, based on service earned prior to the employer’s withdrawal. The remaining 

contributing employers become financially responsible for funding the benefits of these “orphan” 

participants (subject to certain limitations under the law).

It is possible for an orphan-heavy plan to be appropriately funded and remain able to pay the 

benefits the participants have earned. However, even in a best-case scenario, where a 

participating employer withdraws from the plan and pays the market price for the unfunded 

liabilities associated with their participants, the potential for future funding problems may still 

exist due to differences between projected values based on assumptions versus the realized

values (e.g. asset returns, mortality, turnover, retirement, etc.).

The following scenarios illustrate some of the potential plan risks when an employer withdraws.

Scenario 1 – Fully funded plan

If an employer withdraws from a fully funded plan, it may owe no withdrawal liability payments

(as there is no underfunding to split between the withdrawing and remaining employers).

However, the orphaned participants no longer have an employer to backstop any changes in 

funded status and if the plan experiences an unforeseen shock, the remaining employers and their 

workers must fund the benefits. On average, funding for multiemployer plans fell by over 50

percent in the period 2000-2010.2F

3 Plans that had employers withdraw before this period now face 

large funding shortfalls with fewer contributing employers. Requiring more money from a 

smaller employer base jeopardizes the sustainability of the plan.

 2 PPA §503(a)(2) required a series of disclosures including “...(A) The number of employers obligated to contribute to the plan. 

(B) A list of the employers that contributed more than 5 percent of the total contributions to the plan during such plan year. (C) 

The number of participants under the plan on whose behalf no contributions were made by an employer as an employer of the 

participant for such plan year and for each of the 2 preceding plan years. (D) The ratios of (i) the number of participants under the 

plan on whose behalf no employer had an obligation to make an employer contribution during the plan year, to (ii) the number of 

participants under the plan on whose behalf no employer had an obligation to make an employer contribution during each of the 2 

preceding plan years...”

3 PBGC 2016 Databook Table M-9.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Scenario 2 – Withdrawing employer pays its full withdrawal liability

Risks are similar to those in Scenario 1, if the withdrawal liability is calculated on a market 

basis. However, if the withdrawal liability is calculated on a basis that does not incorporate the 

full market price, or if the plan settles with the employer for less than the full amount, there is 

additional risk. Also, if an employer were to exit a plan and pay full withdrawal liability in a 

lump sum, but the plan has not immunized itself by purchasing assets which match the pension 

liability cash flows (historically rare), the value of this payment would be subject to

asset/liability mismatch risk, which may lead to future investment losses. 

Scenario 3 – Withdrawing employer is unable to pay its withdrawal liability

In cases of severe distress, particularly in the case of bankruptcy, a withdrawing employer may 

be unable to pay a significant portion of its share of plan underfunding. In this situation the plan 

will need to fund the gap either through asset appreciation (which incents the plan to take on 

riskier investing strategies) or by requiring the other participating employers to make up the 

difference. Requiring higher contributions can affect the remaining employers’ ability to 

compete both in terms of attracting and retaining employees and in terms of cost structure and 

profitability. 

Orphan Participants – Alternate Definitions

Analysts have looked at orphan participants, or orphan liabilities, in different ways. The 

preceding discussion has focused on participants whose employer has left the plan. In some 

cases, that may mean that a worker’s ability to earn additional service in the plan has ended. But 

in many multiemployer plans, it is common for workers to have multiple employers in a brief 

period of time, and for all of those employers to be contributors to the plan. The exit of one 

employer may simply mean that a specific project has ended, while workers in the industry move 

on to other projects. This is often the case for plans covering the construction industry and some 

entertainment industry plans.

Since participants may be able to change employers and retain plan coverage, some analysts look 

not at orphan participants, but rather at orphan liabilities – the liabilities for benefits earned due 

to service with an employer no longer in the plan.3F

4 Another approach is to look at orphan 

participants / liabilities based only on employers who officially withdrew from the plan under the 

rules of ERISA. (For example, under ERISA, departures of employers from certain construction 

industry plans may not be treated as a withdrawal, so long as the employer merely finished a 

project and remains committed to rejoin the plan should other projects arise.) Legislation and 

 4 See, e.g. Charles P. Blahous III. “Averting the Multiemployer Pension Solvency Crisis.” Mercatus Research, Mercatus Center 

at George Mason University, Arlington, VA, October 2018 https://www.mercatus.org/system/files/blahous-multiemployerpension-crisis-mercatus-research-v1.pdf See discussion beginning on p.10
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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legislative proposals have sometimes looked at an even smaller subset, orphan liabilities related 

to employers who withdrew and did not pay full withdrawal liability.4F

5

This report review orphan participants, rather than orphan liabilities. It is based on data gathered 

in accordance with the specific definitions and instructions set forth for plans completing the 

annual Form 5500 filing, which further limit the group characterized as orphan participants as 

discussed below.

Reporting on Orphan Participants

Data Source

PPA added a requirement for plans to report on orphan participants. The new information 

requirement was effective with the 2008 plan year and required new reporting on the Form 5500 

filing jointly required by the ERISA agencies. Prior to PPA’s enactment, the ERISA agencies 

had already begun a process to make major updates to the Form 5500 filing, to allow for more 

data to be collected and made public in electronic form.5F

6 These changes were initially scheduled 

to be made for the 2008 plan year. In December 2006 the agencies proposed further changes to 

the Form 5500 to add information required by PPA.6F

7 In response to comments from various 

stakeholders, new forms were adopted which reflected the PPA reporting requirements, to be 

used beginning with the 2009 plan year.7F

8 For 2008 plan years, certain information, including 

information on orphan participants, was reported in an attachment to the Form 5500; other 

information regarding funding was reported on revised versions of the prior Schedule B.

Thus, for 2009 and later plan years the modified Form 5500 filing includes the following 

information requests related to stability of the contribution base as part of Schedule R:

 Question 13 - information for contributing employers that are responsible for more than 5

percent of contributions to the plan for that plan year. (In general, the Form 5500 

instructions treat all members of a controlled group of employers as a single employer.)

Question 13 gathers information on the amount of contribution, the contribution rate and 

the basis on which contributions are assessed, date the employer’s bargaining agreement 

expires, and identifying information for the employer.

 Question 14 - information on the number of orphan participants, defined as “the number 

of participants on whose behalf no contributions were made by an employer as an 

employer of the participant” for the current and two preceding years.

 Question 15 - information on how the number of all inactive participants has changed 

from the number as of one and as of two years prior.

 5 MPRA added special rules for benefit suspensions in certain plans that distinguish orphans based on this criterion (see ERISA § 

305(e)(9)(D)((vii)(I)). There is also an example in proposed legislation S.1076 — 115th Congress (2017-2018), see Section 3 

amending ERISA § 4233.

6 https://www.federalregister.gov/documents/2006/07/21/06-6329/proposed-revision-of-annual-information-returnreports

7 https://www.federalregister.gov/documents/2006/12/11/06-9633/proposed-revision-of-annual-information-returnreports .

8 https://www.federalregister.gov/documents/2007/11/16/07-5521/revision-of-annual-information-returnreports
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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 Question 16 - information on the number of employers withdrawing during the preceding 

year and the aggregate withdrawal liability assessed.

 Question 17 - information on plan mergers or transfers.

The instructions8F

9 for Question 16 clarify that an employer is counted as withdrawing from a plan 

only if it meets the requirements to be treated as a withdrawal under ERISA Section 4203. Thus, 

employers in a building and construction industry plan who cease to contribute (e.g., because 

they have finished up all projects in the area covered by the plan) are not treated as having 

withdrawn from the plan unless they meet the requirements of §4203(b) (e.g. by beginning 

another project in the area within 5 years of completing the prior projects, without resuming 

contributions). This “construction industry” rule also applies to certain other plans, including 

some plans in the entertainment industry.

Supplementing the Form 5500 Instructions, PBGC issued a Technical Update providing interim 

guidance for plans complying with the new requirement for the 2009 plan year, as well as 

additional guidance on interpreting the Instructions.9F

10 To reduce plans’ recordkeeping burdens, 

PBGC’s Technical Update provided that the treatment of employer withdrawals set forth in the 

instructions for Question 16 also applies to the information gathered under Question 14; i.e., the 

guidance required plans to report as orphan participants on Question 14 only those participants 

whose most recent contributing employer had withdrawn from the plan under §4203. (A plan 

need not review the status of any previous employers of the participant.) 

PBGC’s Technical Update also granted plans an alternative approach for answering Question 14, 

which would lower the number of orphan participants being reported to only those individuals 

for whom all of their former employers had withdrawn from the plan. (The guidance suggested a 

plan could review a list of all current contributing employers and report as orphan participants 

those participants who had no covered service with any of these employers.) Plans using the 

alternative approach were required to document this approach on an attachment to Schedule R.

After PPA, the ERISA agencies separated out the Schedule B attachment to the Form 5500 

(certified by the plan’s actuary) into separate schedules for multiemployer plans (Schedule MB) 

and other plans (Schedule SB). The MB contains robust data on the number of participants as of 

the start of the plan year.

Schedule MB also contains information on the zone status of the plan. MPRA added a new zone 

sub-status of Critical and Declining (C&D) plans. The 2015 MB was the first to require plans to 

use a code of “D” to identify this new status. 84 plans used the new status code of “D”; other 

information sources (notices to participants and zone status reports) indicate that approximately 

one quarter of Critical and Declining plans did not correctly change their status code to the new 

code in the 2015 Form 5500 filing. Data shown in this report on the zone status of plans corrects 

the status code to Critical and Declining for these plans, based on the information from other 

sources.

 9 Instructions for 2015 Form 5500, Pg. 60-61

10 PBGC Technical Update 10-1 https://www.pbgc.gov/prac/other-guidance/tu/technical-update-10-1-multiemployer-plansclarification-schedule-r-form-5500
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Schedule MB is only required to be filed by plans subject to the minimum funding rules.

Terminated multiemployer plans continue to operate and pay benefits but are no longer subject to 

the minimum funding rules and thus do not provide the MB filing after plan termination. This 

study generally excludes terminated plans except for purposes of Figure 2 and Figure 3.

In 2013 PBGC submitted a study of the effects of PPA to Congress.10F

11 A section of the report 

discussed Orphan Participants and found a higher percentage of orphan participants in distressed 

plans than in non-distressed plans. This supplement provides more recent data available on 

orphan participants and further examines the role that orphan participants play in the funded 

status of multiemployer plans. This analysis focuses on information reported by plan 

administrators on Form 5500 for the 2015 plan year, supplemented by data reported for prior 

years.11F

12

Data Anomalies

Initial validation checks on the data reported on Line 14a of the 2015 Forms 5500 showed:

 Less than 30 percent of plans report any orphans.

o Of the plans that reported orphans, 11 reported that the number of orphan 

participants is greater than or equal to the total reported inactive participant count, 

indicating potentially inaccurate data.

 More than 60 percent of plans left the orphan field blank.

 Less than 10 percent of plans affirmatively reported zero orphan participants.

Figure 2 illustrates plan reporting patterns across all plans, and the above key findings.

 11 https://www.pbgc.gov/sites/default/files/legacy/docs/pbgc-report-multiemployer-pension-plans.pdf

12 The number of orphan participants at the beginning of the 2015 plan year is reported on Schedule R, Line 14a and the number 

of employer withdrawals on line 16a. The number of total plan participants at the beginning of the 2015 plan year is reported on 

Line 2b of Schedule MB and as of the end of the year on Line 6 of Form 5500. Both lines 2b of Schedule MB and line 6 of Form 

5500 break out counts for active as well as reporting total participants. Zone status is reported on Line 4b of the 2015 Schedule 

MB and has been supplemented by PBGC analysis for certain plans.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Figure 2 - Orphan Reporting in All Multiemployer Plans (2015)

Number of 

Orphan 

Participants

Number of 

Total 

Participants*

Number 

of Plans

Ratio of 

Orphans to 

Total 

Participants

1. Plans that left the field blank 0 2,800,781 870 0.0%

2. Plans reporting a zero value for orphans 0 820,495 110 0.0%

3. Plans reporting orphans ≥ inactive participants 39,472 26,088 11 151.3%

4. Plans with plausible, non-zero value for orphans 1,667,531 6,664,063 381 25.0%

Total plans 1,707,003 10,311,427 1,372 16.6%

Source: Plan Year 2015 Form 5500 Filings *

Participant Count for Terminated or Insolvent Plans Based on Greater of Form 5500 (End of Year Count) and 

Attachment MB (Beginning of year Count)

Terminated and Insolvent Plans 

While terminated plans remain obligated to file certain sections of the Form 5500, they are 

exempt from certain other filing requirements, including the filing of the Schedule MB. There 

are also a few plans which, while ongoing, are insolvent and receiving financial assistance from 

PBGC. Figure 3 shows the reporting on orphans in terminated and ongoing insolvent plans.

Figure 3 - Anomalous Orphan Reporting in Terminated and Insolvent Plans (2015)

Number of 

Orphan 

Participants

Number of 

Total 

Participants*

Number 

of 

Plans

Ratio of 

Orphans to 

Total 

Participants

1. Plans that left the field blank 0 77,072 74 0.0%

2. Plans reporting a zero value for orphans 0 2,759 2 0.0%

3. Plans reporting orphans ≥ inactive participants 1,598 1,575 4 101.5%

4. Plans with plausible, non-zero value for orphans 70,963 72,102 36 98.4%

Total plans 72,561 153,508 116 47.3%

Source: Plan Year 2015 Form 5500 Filings, *

Participant Count Based on Greater of Form 5500 (End of Year Count) and Attachment MB (Beginning of year 

Count)

Almost all of the plans shown in Figure 3 are terminated (there are only a handful of ongoing 

insolvent plans included). In plans terminated by mass withdrawal, one would expect that 

virtually all participants would be orphan participants as their most recent employer would have 

withdrawn. Nevertheless 76 plans, representing more than half of participants covered by 

insolvent or terminated plans, report zero or blank numbers of orphans. Furthermore, 4 plans 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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report more orphan participants than the number of participants reported on either the attachment 

MB or the Form 5500.

Based on the anomalies and missing data for terminated and ongoing insolvent plans, they are 

removed from the remaining analysis in this study. The remaining subgroup of plans will be 

referred to as Ongoing Plans for the remainder of this report. Figure 4 shows the distribution of 

orphan reporting in tabular format after removing these terminated and ongoing insolvent plans.

Figure 1, shown in the report summary, presents the distribution of reporting issues among these 

plans in a graphical format.

Figure 4 - Orphan Reporting in Ongoing Plans (2015)

Number of 

Orphan 

Participants

Number of 

Total 

Participants

Number 

of 

Plans

Ratio of 

Orphans to 

Total 

Participants

1. Plans that left the field blank 0 2,794,082 796 0.0%

2. Plans reporting a zero value for orphans 0 820,495 108 0.0%

3. Plans reporting orphans ≥ inactive participants 37,874 25,950 7 145.9%

4. Plans with plausible, non-zero value for orphans 1,596,568 6,663,402 345 24.0%

Total plans 1,634,442 10,303,929 1,256 15.9%

Source: Plan Year 2015 Form 5500 Filings 

After removing terminated and insolvent plan data, more than 60 percent of the remaining 

ongoing plans left the orphan reporting field blank. About 9 percent of plans affirmatively 

reported zero orphan participants, and a few (7) plans reported that the number of orphan 

participants is greater than the total reported inactive participant count, indicating potentially 

inaccurate data. We further explore these anomalies below.

Blank and Zero Values 

For filers that left the orphan field blank, this could mean either:

 The filer intended a blank value to mean the plan has zero orphan participants as defined 

in the instructions, or

 The filer skipped the question. This group could include plans that cover orphan 

participants, but the plan administrator lacks enough information to provide a reasonable 

estimate for reporting purposes.

To further test the quality of the reporting we looked for plans that reported zero or blank 

orphans after reporting withdrawal of an employer in any of the plan years 2010 through 2014. If 

an employer withdraws, in order for the plan to have zero orphans, no former employees could 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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have had the withdrawn employer as their final employer. While this could conceivably happen 

in smaller plans, it is unlikely to have occurred repeatedly.

Figure 5 examines the incidence of zero or blank orphan reporting responses on the 2015 Form 

5500 by whether a plan reported a withdrawal during plan years 2010-2014. 

Figure 5 - Ongoing Plans Reporting Zero or Blank Orphans in 2015, by Reported Withdrawal History

SMALL MID-SIZE LARGE TOTAL

(Under 2,500 

participants)

(2,500 to 

35,000 

participants)

(Greater than 

35,000 

participants)

1. Reported one or more withdrawals during 2010-2014 period

Plans 106 84 8 198

Total Participants 121,244 803,313 696,935 1,621,492

2. Did not report a withdrawal during 2010-2014 period

Plans 534 167 5 706

Total Participants 472,269 1,197,163 323,653 1,993,085

3. Total (all blank or zero reporters in 2015)

Plans 640 251 13 904

Total Participants 593,513 2,000,476 1,020,588 3,614,577

Source: Plan Year 2010-2015 Form 5500 Filings 

As shown in Figure 5, plans of a variety of sizes do not report orphans, even when they have 

reported a recent employer withdrawal. 198 plans that reported one or more recent withdrawals

nevertheless reported zero or blank orphans, representing somewhat more than one-fifth of all 

plans reporting zero or blank orphans for plan year 2015. These plans covered 1.6 million 

participants. 

However, most (706 of 904) plans reporting zero or blank participants have not recently reported 

an employer withdrawal. These plans cover 2 million participants. Many of these plans may 

report zero or blank number of orphans because it is rare for these plans to experience a 

withdrawal.

This analysis only reviews withdrawal history for the 5 years preceding a zero or blank orphan 

report. Data on the number of employers contributing to multiemployer plans is a relatively 

recent addition to the Form 5500 filing. If data were available to cover a longer period, additional 

plans might be found which do not report an orphan value, even though the plan had experienced 

a withdrawal.

Based on the limited data on employer withdrawals discussed above, it appears that more than 

one-fifth of zero and blank orphan reporting plans, covering 1.6 million participants, actually 

experienced a recent withdrawal. Thus, these plans are likely to be reporting orphan participants 

incorrectly.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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Since the definition of the action that constitutes a withdrawal differs between plans that cover 

different industries (e.g. construction vs. transportation), additional analysis by industry later in 

this report provides more insight on the plans that reported blank or zero fields.

Reported Value Check 

All orphan participants, as defined for purposes of the Schedule R, should be reported as inactive 

participants, since they were most recently employed by an employer that ceased contributing 

before the beginning of the year and thus would not be counted as an actively employed

participant. In most cases, we would anticipate that the number of orphans would be significantly 

less than the number of inactive participants, since some of the inactive participants likely 

worked for employers who remain in the plan.

To evaluate the prevalence of over-reporting errors in the data, we tested whether plans showed 

more orphans than inactive participants, using the beginning of the year participant counts 

reported on the Schedule MB. We identified 35 such plans covering 132,000 participants. We 

further investigated these plans and found that, for most of the plans, the number of inactive 

participants as of the end of the year (as reported on line 6 of the Form 5500) was equal to or

exceeded the number of orphans.

As of the date that data is compiled for the actuarial valuation (the source for beginning of the 

year information reported on the Schedule MB), some plans may not have data on employees 

that have left employment but did not yet retire. Thus, for purposes of determining the number of 

active workers for the actuarial valuation, some plans may have a practice of deeming workers to 

be actively employed unless the worker retired before the end of the year or had less than a 

threshold number of hours in the prior year. Presumably, by the time the end of year participant 

count is prepared for the Form 5500, prior-year workers who had no work hours during the 

current year would be appropriately characterized as former workers and shown as “inactive” 

participants.

Based on this timing analysis, we checked for over-reporting of orphans based on reported 

orphan participant counts in excess of the greater of the inactive participant count reported on the 

Schedule MB (as of the beginning of the plan year) or the inactive participant counts reported on 

the 2015 Form 5500 (as of the end of the plan year). This reduced the number of ongoing plans 

flagged as reporting unreasonably high orphan participant counts to 7 plans covering 26,000

participants.

Orphan Participant Counts 

For the subgroups of plans reported in Figure 1, Figure 4 shows the number of orphan 

participants and number of total plan participants. 

Despite the identified reporting issues, most of the participants in the Multiemployer Program are 

in plans that reported a value for orphans (i.e., 6.7 million out of 10.3 million total participants in 

ongoing plans).
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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For the 7 plans that reported more orphans than total inactive participants, the aggregate ratio of 

orphan participants to total participants is 146 percent. This statistic supports the exclusion of 

these plans in general analyses since these results, both individually and in aggregate, are not 

plausible.

Plan Size

Figure 6, Figure 7 and Figure 8 expand the information from Figure 1 by adding plan size

categories based on total covered plan participants. 

Figure 6 - Orphan Reporting by Ongoing Small Plans (2015)

Figure 8 - Orphan Reporting by Ongoing Large Plans (2015)

Figure 9 expands on the information in Figure 4 to show numbers of orphans by reporting status 

and plan size along with additional information on the number of inactive participants.

571 Plans, 

Blank 

3 Plans, More 

orphan 

participants 

than inactive

69 Plans, 

Zero 

value 

148 Plans, Plausible 

non-zero value

791 Small Plans (less than 2,500 

participants)

7 Plans, Blank 

0 Plans, More 

orphan 

participants 

than inactive

6 Plans, 

Zero value 

36 Plans, 

Plausible 

non-zero 

value

49 Large Plans (more than 35,000 

participants)

218 Plans, 

Blank 

4 Plans, More orphan participants than inactive

33 Plans, 

Zero value 

161 Plans, 

Plausible 

non-zero 

value

416 Mid-Size Plans (2,500 to 35,000 

participants)

Figure 7 - Orphan Reporting by Ongoing Mid-Size Plans (2015)
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

12

Figure 9 - Orphan Reporting by Plan Size, Ongoing Plans (2015)

SMALL MID-SIZE LARGE TOTAL

(Under 2,500 

participants)

(2,500 to 35,000 

participants)

(Greater than 

35,000 

participants)

1 Plans that left the 

field blank

Plans 571 218 7 796

Inactive Participants 330,482 1,029,044 298,526 1,658,052

Total Participants 532,317 1,695,772 565,993 2,794,082

2

Plans reporting a 

zero value for 

orphans

Plans 69 33 6 108

Inactive Participants 37,995 182,618 225,020 445,633

Total Participants 61,196 304,704 454,595 820,495

3

Plans reporting

orphans ≥ inactive 

participants

Plans 3 4 - 7

Inactive Participants 1,509 14,696 - 16,205

Total Participants 2,007 23,943 - 25,950

Orphan Participants 1,863 36,011 - 37,874

4

Plans with 

plausible, non-zero 

value for orphans

Plans 148 161 36 345

Inactive Participants 118,861 1,058,117 3,228,077 4,405,055

Total Participants 169,511 1,580,176 4,913,715 6,663,402

Orphan Participants 58,815 298,815 1,238,938 1,596,568

Orphan as a % of 

inactive Participants 49.5% 28.2% 38.4% 36.2%

Orphan as % of 

Participants 34.7% 18.9% 25.2% 24.0%

Total ongoing plans 

As reported 

Plans 791 416 49 1,256

Inactive Participants 488,847 2,284,475 3,751,623 6,524,945

Total Participants 765,031 3,604,595 5,934,303 10,303,929

Orphan Participants 60,678 334,826 1,238,938 1,634,442

Orphan as % of 

Participants 7.9% 9.3% 20.9% 15.9%

Source: Plan Year 2015 Form 5500 Filings 

Analysis by Plan Size 

 Small plans (fewer than 2,500 participants) are relatively more likely to report blank or 

zero orphan counts, but the phenomenon persists among plans in all three size categories.

 Only small and mid-size plans report orphan counts greater than the inactive population; 

larger plans do not fail this basic logic test. 

 The average percentage of orphan participants across plan size, for plans reporting a 

plausible, non-zero value, varies within a band between 15 percent and 35 percent. 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

13

Estimating System-wide Numbers of Orphan Participants

Meeting the test for plausible, non-zero reported numbers of orphans is not sufficient to confirm 

that the data is being reported as intended. Experts consulted by PBGC stated that many plans do 

not meticulously track former employment data in order to identify orphan participants -- or at 

least have not done so since plan inception. Often, these experts explain that the prior employer

data is ancillary to the determination of participants’ benefits which are typically determined 

based on total credited service earned under the plan, without regard to the specific employer(s) 

for whom the employer worked.

Experts cited many reasons it may be difficult for plans to track this data. These reasons include: 

tracking of employers after they withdraw (e.g., to determine whether they have become 

affiliated with another employer in the plan); reconstructing employer data from plans that have 

merged into a plan, (e.g., where data locations and personnel familiar with prior recordkeeping 

systems are no longer available); as well as other issues involved in tracking the final employer 

for each worker (and their beneficiaries) over decades and multiple recordkeeping systems.

Given this uncertainty, we estimated upper and lower bounds for the number of orphan 

participants in the system.

 The number of orphans reported by plans that have a plausible non-zero value is 1.6

million. This is likely an approximate lower bound on the number of orphans in the 

system.

 Orphans represent 24 percent of all participants in plans that report a plausible non-zero 

orphan value. Extrapolating this value to the entire multiemployer system of reporting 

plans results in an estimate of 2.5 million orphan participants, which might serve as an

upper bound on the number in the system.

The upper bound estimate of 2.5 million participants may be high for several reasons. As shown 

in Figure 9, plans reporting zero and blank orphan values tend to be smaller on average and have 

fewer inactive participants in general. Thus, extrapolating the fraction of total participants to 

these plans likely overstates the fraction of inactive participants that should be characterized as 

orphans.12F

13 In addition, review of the data by industry shows that many of these small plans are in 

the construction industry, where the difference in the rules for employer action which constitutes 

a withdrawal results in an effectively narrower definition of what would be construed as an 

orphan participant on the Form 5500 report.

Given the quality of the data reporting, both the lower and upper bounds are best viewed as 

estimates of the range of plausible values.

 13 If instead of extrapolating based on total participants, we instead extrapolated the ratio of orphan participants to inactive 

participants as equal for blank and zero orphan reporting plans to the ratio for plausible reporters, the system would have an 

estimated 2.4 million orphans.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

14

Historical Trends

Largest Critical and Declining Plans 

We also reviewed historical consistency of orphan reporting over time. Given the anomalies 

previously noted in the data, the more complete reporting by larger plans, and the greater 

incentive that troubled plans might have to understand the underlying population changes that 

lead to orphan participants, we examined the reported data on the largest Critical and Declining 

plans, reviewing data reported from 2010 to 2015.13F

14

Figure 10 - Historical Orphan Reporting by Largest Critical and Declining Plans

The largest Critical and Declining plan, the Central States plan, is shown as a solid blue line. It

shows a relatively consistent pattern of increasing percentages of orphan participants, as 

additional employers leave the plan. The second largest Critical and Declining plan, the Bakery 

and Confectionery plan, is shown as a dashed black line. It shows a sharp spike in orphan 

participants in 2012, due to the departure of a major employer (the proximate cause of the plan’s 

critical and declining status). Thereafter, reported percentages of orphans decline slightly as the 

orphan population matures more rapidly than does the remaining population covered by the plan.

 14 PBGC Technical Update 2010-1 allowed plans to use various approximation techniques to estimate the number of participants

for 2009 (the second year of reporting and the first under the new version and instructions for Schedule R), before moving to the 

reporting requirements which applied since 2010. 2008 data was reported solely as an unstructured attachment Thus 2008 and 

2009 data have been excluded from this historical comparison.

68% 66% 66%

64%

45% 44%

45% 46% 44% 47% 46% 49% 51% 53%

19% 17% 17%

35% 34% 34%

34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2009 2010 2011 2012 2013 2014 2015

Orphans as a Percent of Total Participants

2010 - 2015 for the Largest Critical and Declining Plans

United Mine Workers of America 1974 Pension Plan

CENTRAL STATES, SOUTHEAST & SOUTHWEST AREAS PENSION PLAN

BAKERY & CONFECTIONERY UNION & INDUSTRY INTERNATIONAL PENSION FUND
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

15

The third largest Critical and Declining plan, the UMWA plan, shows an anomalous pattern with 

a sharp decrease in the percentage of orphan participants in 2013. This is due to erroneous 

reporting for 2010-2012; as disclosed by the plan in an attachment to the 2013 Form 5500 filing, 

“...active participants and deferred vested participants were incorrectly included within the 

number...” [shown for line 14a in prior years]. For the years before the revision and after the 

revision to its reports the plan shows a reasonable pattern assuming the orphan population is 

more mature than the remaining population. However, the discontinuity in the pattern highlights 

an example where even a plausible non-zero report may still misstate the number of orphan 

participants. 

Examining these three plans provides examples of how the populations are expected to change. 

Both the Central States and Bakery and Confectionery plans exhibit plausible values over time 

whereas the UMWA plan is an example of one type of reporting error. 

Data Anomalies for All Reporting Plans over Time 

We also examined whether the general reporting patterns were changing over time for all plans. 

The below chart compares the percentages of plans reporting various statuses as shown for the 

2010 year and the 2015 year.

Figure 11 - Changes in Reporting by Ongoing Plans (2010 & 2015)

The percentage of plans reporting a plausible non-zero value for orphans declined from 2010 to 

2015, and the percentage of plans reporting more orphan than inactive participants and leaving the 

orphan reporting question blank increased. This suggests the quality of reporting on orphan 

participants may be deteriorating.

Blank 

59%

More orphan participants than inactive

0%

Zero value 

12%

Plausible non-zero 

value...

2010 Orphan Reporting 

(1,348 Ongoing Plans Reporting)

Blank 

63%

More orphan participants than inactive

1%

Zero value 

9%

Plausible non-zero 

value

27%

2015 Plan Year, Orphan Reporting

(1,256 Ongoing Plans Reporting)
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

16

Industry

PBGC classified plans into industry14F

15 groups to examine the concentration of orphans within 

industries. The results are shown below in Figure 12, which shows orphan and total participant 

counts, active counts, and number of plans, along with related metrics.

As noted earlier, the instructions for the Form 5500 identify orphans based on whether a 

participant most recently worked for an employer that formally withdrew from the plan. In the 

construction industry and in some plans in the entertainment and other industries, this may lead 

to fewer reported orphans, as the nature of employer activity that constitutes a withdrawal varies, 

under ERISA, from similar employer activity in a different industry.

For example, under ERISA, departures of employers from plans subject to the “construction 

industry rule” may not be treated as a withdrawal, so long as the employer merely finished a 

project and remains committed to rejoin the plan should other projects arise during a specified 

period. Special rules apply to some other industries as well. 

 15 Industry codes are reported on Form 5500. Codes are reviewed by PBGC staff and replaced where appropriate.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

17

Figure 12 - Orphan Participant Metrics in Ongoing Plans, by Industry (2015)

Industry

Orphan Participants Total Participants Active Plan Participants All Plans

Number

As Percent 

of Total 

Reported 

Orphan 

Participants

Number

As Percent 

of Total 

Participants

Orphans As 

Percent of 

Participants

Number

Reported 

Orphans 

Per Active 

Participant

Participants 

Supported 

Per Active 

Participant

Number

As Percent 

of Total 

Plans

Reported 

Orphans 

Per Plan

AGRICULTURE 11,979 0.8% 19,355 0.2% 62% 1,210 9.9 16.0 6 0.5% 1,997

MINING 45,570 2.9% 108,899 1.1% 42% 9,585 4.8 11.4 5 0.4% 9,114

CONSTRUCTION 221,875 13.9% 3,756,065 36.5% 6% 1,495,080 0.1 2.5 742 59.4% 299

MANUFACTURING 360,324 22.6% 993,876 9.7% 36% 254,857 1.4 3.9 99 7.9% 3,640

TRADE 144,059 9.0% 1,517,458 14.8% 9% 575,822 0.3 2.6 80 6.4% 1,801

TRANSPORTATION & 

UTILITIES 433,175 27.1% 1,563,186 15.2% 28% 434,535 1.0 3.6 128 10.2% 3,384

INFORMATION 3,838 0.2% 234,981 2.3% 2% 113,229 0.0 2.1 25 2.0% 154

FINANCE, INS. & REAL 

ESTATE 0 0.0% 102,035 1.0% 0% 100,660 0.0 1.0 2 0.2% 0

OTHER SERVICES 57,048 3.6% 1,124,337 10.9% 5% 483,345 0.1 2.3 109 8.7% 523

LEISURE AND 

HOSPITALITY 318,700 20.0% 857,787 8.3% 37% 300,916 1.1 2.9 53 4.2% 6,013

ALL 1,596,568 100.0% 10,277,979 100.0% 16% 3,769,239 0.4 2.7 1,249 100.0% 1,278

Source: Plan Year 2015 Form 5500 Filings. Excludes plans currently receiving Financial Assistance and terminated plans currently booked by PBGC; also excludes plans reporting more 

orphans than total inactive participants.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

18

Orphan Participants 

Figure 12 provides several industry insights:

 Construction industry plans cover more than one-third of all participants (36.5 percent) 

but have relatively few reported orphans per active participant (0.1 versus an average of 

0.4 for the entire multiemployer system).

o While the low number of orphans per active participant may be influenced by the 

special construction rule limiting which former workers are reported as orphans, 

the ratio of participants to workers is also lower than for the system as a whole

(2.5 participants per active participant vs. a system average of 2.7). Thus, the low 

number of orphans per active participant in construction plans is not entirely due 

to the impact of the construction industry rule – in part it reflects fewer plan 

participants per active worker.

 Over 25 percent of all reported orphans are in plans in the transportation industry, which 

covers only 15 percent of participants.

 Manufacturing and Leisure & Hospitality each have over 20 percent of the system’s 

orphans while covering less than 10 percent of participants. 

Orphan vs. Total Plan Participants 

The ratio of orphans to the total participant base within each industry provides other useful

information.

Five industries (Agriculture, Mining, Manufacturing, Transportation/Utilities, 

Leisure/Hospitality) representing almost 3.5 million plan participants reported that more than 

one-quarter of their participants are no longer associated with a contributing employer. 

Agriculture and Mining industries have the highest ratio of orphans to total participants – over 40 

percent of the participants in these industries are reported as orphans.

Orphan vs. Active Plan Participants 

Figure 12 shows both the number of orphans and the number of total participants “supported” by 

each active participant, since contributions are generally based on the active participants of 

contributing employers. We can easily calculate how many inactive participants each active 

participant needs to support by subtracting one from this value. Revisiting Figure 12 with this in 

mind we find that, in all but one industry, active participants are supporting at least one inactive 

participant with contributions from their employers.

Plans in the Agriculture and Mining industries have by far the highest numbers of orphans and 

total participants being supported by active participants. Active participants are supporting 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

19

relatively few orphans in Construction and Trade industries, where there are 4 to 7 actives for 

each reported orphan participant.15F

16

These metrics “per active participant” provide simple but critical insight into the implications of 

a high number of orphans in a plan. Orphans are a particular type of inactive participant. 

However, the larger systemic issue may be the legacy costs associated with plan maturation and 

an inability to replace active workers within plans.

Zone

PPA created a process for multiemployer plans to identify funding challenges and document a

plan to address any funding shortfall. Based on this plan level analysis, the plan actuary certifies 

to the zone status of the plan. 

The zone status is a function of the plan’s funded status, projected ability to comply with funding 

standards, and time until likely insolvency. As amended in 2014, PPA designates the most 

troubled plans as “Critical and Declining” (C&D). Plans can also be designated as “Critical”

(Red) or “Endangered” (Yellow). A subset of the Endangered zone status, referred to as 

“Seriously Endangered” (Orange) is sometimes broken out as well. A plan that does not meet the 

criteria to be included in one of these zones is said to not have a risk status (Green zone). 

Definition of the zones are set forth in ERISA and the Internal Revenue Code.16F

17 Zone status 

information is collected on Schedule MB; the zone status codes were most recently modified to 

add a code for critical and declining plans for 2015 and later plan years.

Figure 13 groups plans by both size and zone status and provides information on the prevalence 

of orphan participants within each class. The left side of the chart displays this information solely 

for plans that reported a plausible non-zero number of orphan participants; the right side of the 

chart adds in plans that reported blank or zero orphan participant counts. The zones are organized 

with the most troubled zone (Critical & Declining) at the top and moves through the zones in 

order towards the bottom of the chart, where Green zone plans are displayed. 

Orphans represent a large share of total participants for Critical and Declining plans, particularly 

large Critical and Declining plans. As the zone status improves, the ratio of orphans to 

participants generally decreases (indicating that having a high proportion of orphans within the 

plan is a signal of, or potentially leads to, plan funding issues). 

Comparing the left side of the chart with the right side shows the impact of the number of zero or 

blank orphan participant reports on the aggregate statistics. This impact is particularly significant 

 16 The “orphan” liability problem may be less significant in the construction industry because participants whose employers 

leave the plan are often re-hired by replacement employers who take over the work of the exiting employer and contribute to the 

plan. However, orphan liabilities may still arise during periods of recession, or if non-union competition enters the jurisdiction of 

the plan, which can lead to participants who no longer have employers contributing to the plan. And there have been several 

construction plans that have incurred mass withdrawals with subsequent insolvencies that currently receive financial assistance; 

these plans have generally had orphan liabilities.

17 See Internal Revenue Code § 432.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

20

when looking at small plans, which tend to report zero or blank orphan data more frequently than 

do medium or large plans.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

21

Figure 13 - Orphan Participant Metrics by Plan Size, Within Zone Status (2015)

Zone Status

Plan Size 

(by 

Participant 

Count)

Plans Reporting Orphan Participants All Plans (Including Blank & Zero Reporters)

Number 

of Plans 

Orphan 

Count

Total 

Number of 

Participants

Orphans as a 

Percentage of 

Participants

Orphans 

per Plan

Number of 

Plans 

Total 

Number of 

Participants

Orphans as a 

Percentage of 

Participants

Orphans 

per Plan

Critical & 

Declining

Small 29 12,809 30,408 42% 442 68 68,189 19% 188 

Mid-Size 22 74,212 235,279 32% 3,373 30 265,421 28% 2,474 

Large 8 427,309 868,584 49% 53,414 9 917,207 47% 47,479 

Subtotal 59 514,330 1,134,271 45% 8,717 107 1,250,817 41% 4,807 

Critical

Small 28 9,446 24,980 38% 337 109 92,649 10% 87 

Mid-Size 39 98,530 426,920 23% 2,526 70 695,535 14% 1,408 

Large 10 343,659 1,006,038 34% 34,366 12 1,306,342 26% 28,638 

Subtotal 77 451,635 1,457,938 31% 5,865 191 2,094,526 22% 2,365 

Seriously 

Endangered

Small - - - 0% - 2 1,167 0% - 

Mid-Size - - - 0% - 3 23,606 0% - 

Large - - - 0% - - - 0% - 

Subtotal - - - 0% - 5 24,773 0% - 

Endangered

Small 8 1,455 11,133 13% 182 89 86,095 2% 16 

Mid-Size 19 31,250 207,889 15% 1,645 54 515,533 6% 579 

Large 4 15,000 364,602 4% 3,750 6 546,110 3% 2,500 

Subtotal 31 47,705 583,624 8% 1,539 149 1,147,738 4% 320 

Neither 

Endangered 

nor Critical

Small 83 35,105 102,990 34% 423 520 514,924 7% 68 

Mid-Size 81 94,823 710,088 13% 1,171 255 2,080,557 5% 372 

Large 14 452,970 2,674,491 17% 32,355 22 3,164,644 14% 20,590 

Subtotal 178 582,898 3,487,569 17% 3,275 797 5,760,125 10% 731 

Total 345 1,596,568 6,663,402 24% 4,628 1,249 10,277,979 16% 1,278 

Source: Plan Year 2015 Form 5500 Filings. Excludes plans currently receiving Financial Assistance, terminated plans currently booked by PBGC and plans reporting more orphans than total inactive 

participants. Plans categorized by size using criteria for Figures 5 – 9. Data reflects correction to zone statuses.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

22

While the number of total orphan participants are similar between the C&D, Red and Green 

zones, the proportion of orphans to total participants is much higher in the C&D zone (41

percent) and the Red zone (22 percent) than for the Green zone plans (10 percent). 

Further, plans in a C&D or Red zone appear more likely to have orphans than Green zone plans.

59 of 107 C&D plans (55 percent) and 77 of 191 Red zone plans (40 percent) report having 

orphans, compared to only about 22 percent (178 of 797) plans in the Green zone.

We tested these inferences statistically and found that these three groups (C&D, Red and Green 

zones) have a statistically significant difference in the proportion of the plan population that are 

orphans. We tested for significance using a grouped t-test to compare the ratios of orphan 

participants within a plan to total plan participants across zones. Figure 14 shows the resulting pvalues. In this test, the p-value may be thought of as the probability that the observed ratio of 

orphans to participants is different by zone merely due to chance. Areas marked in blue with 

green italic font are statistically significant at the 5 percent level – in other words they have less 

than a 5 percent likelihood of occurring merely by chance.

Figure 14 - Likelihood that Orphan to Participant Ratio by Zone is due to Chance

Plans Reporting Orphans, Testing Ratio of Orphans to Participants

P-Values Critical & 

Declining Critical Endangered Neither Endangered nor Critical

Critical & 

Declining n/a 0.0152 <.0001 <.0001

Critical 0.0152 n/a 0.0205 0.3052

Endangered <.0001 0.0205 n/a 0.0457

Neither Endangered 

nor Critical <.0001 0.3052 0.0457 n/a

Source: PBGC Calculations Based on Plan Year 2015 Form 5500 Filings

Reporting on Inactive Participants

Orphans are generally viewed as relating primarily to a plan’s inactive population. The orphan 

data collected via Form 5500 reporting is explicitly limited to inactive participants. The analysis 

thus far indicates that a high concentration of orphans, at a minimum, signals the potential for 

funding issues. However, since orphans are a subset of inactive participants, expanding the 

analysis to include the inactive participant group may provide additional insights.

To remain sustainable, an ongoing multiemployer pension plan requires new active participants 

to replace those who retire or leave the plan. When a plan fails to maintain its active population,
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

23

the legacy costs associated with inactive participants (those who are currently retired or 

separated participants with vested benefit promises from currently contributing employers, along 

with orphaned participants) can overwhelm the ability of the remaining contributing employers

and their active participants to sufficiently fund the plan.

Participant Status and Plan Zone Status

Figure 15 is taken from the 2016 PBGC Data Tables and shows the participant status (active, inpay [retired or a beneficiary] or separated entitled to future vested benefit) by zone for a 7-year

period. 
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

24

Figure 15 - History of Participants by Plan Zone Status and Participant Status

Zone 

Status Participant Type Participants

2009 2010 2011 2012 2013 2014 2015

Critical & 

Declining

Active n/a n/a n/a n/a n/a n/a 198,918 

In Pay n/a n/a n/a n/a n/a n/a 647,658 

Separated Vested n/a n/a n/a n/a n/a n/a 405,065 

Total Participants n/a n/a n/a n/a n/a n/a 1,251,641 

Percent of System 12.1%

Critical 

Active 1,517,745 1,340,071 1,086,423 1,024,780 1,010,536 929,960 692,675 

In Pay 1,273,112 1,363,805 1,260,081 1,316,254 1,335,741 1,389,368 715,693 

Separated Vested 1,110,833 1,225,245 1,127,983 1,106,196 1,111,141 1,110,573 696,337 

Total Participants 3,901,690 3,929,121 3,474,487 3,447,230 3,457,418 3,429,901 2,104,705 

Percent of System 37.9% 38.6% 34.3% 34.3% 34.4% 33.9% 20.4%

Seriously 

Endangered

Active 530,380 94,604 40,040 39,360 18,927 1,994 9,987 

In Pay 563,156 178,804 126,012 125,890 105,646 2,243 10,776 

Separated Vested 376,535 61,484 31,723 27,406 13,523 1,149 4,010 

Total Participants 1,470,071 334,892 197,775 192,656 138,096 5,386 24,773 

Percent of System 14.3% 3.3% 2.0% 1.9% 1.4% 0.1% 0.2%

Endangered

Active 854,376 623,495 494,565 540,262 518,314 463,100 441,553 

In Pay 553,512 436,028 417,803 468,800 500,775 420,049 427,162 

Separated Vested 383,906 283,399 267,747 291,814 304,329 275,406 285,406 

Total Participants 1,791,794 1,342,922 1,180,115 1,300,876 1,323,418 1,158,555 1,154,121 

Percent of System 17.4% 13.2% 11.6% 12.9% 13.1% 11.4% 11.2%

Neither 

Endangered 

nor Critical

Active 1,435,342 1,972,096 2,230,143 2,153,044 2,168,706 2,295,794 2,435,851 

In Pay 932,355 1,416,462 1,661,784 1,569,166 1,597,576 1,757,024 1,825,552 

Separated Vested 757,053 1,174,192 1,390,276 1,391,463 1,379,723 1,482,209 1,507,286 

Total Participants 3,124,750 4,562,750 5,282,203 5,113,673 5,146,005 5,535,027 5,759,236 

Percent of System 30.4% 44.9% 52.1% 50.9% 51.1% 54.6% 55.9%

Total

Active 4,337,843 4,030,266 3,851,171 3,757,446 3,716,483 3,690,848 3,778,984 

In Pay 3,322,135 3,395,099 3,465,680 3,480,110 3,539,738 3,568,684 3,626,841 

Separated Vested 2,628,327 2,744,320 2,817,729 2,816,879 2,808,716 2,869,337 2,898,104 

Total Participants 10,288,305 10,169,685 10,134,580 10,054,435 10,064,937 10,128,869 10,303,929 

Source: Plan Year Form 5500 Filings. Based on PBGC 2016 Data Book, Table M-17. Excludes plans currently receiving Financial Assistance and terminated plans currently booked by PBGC. 2015 Data reflects 

correction to zone statuses.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

25

Figure 16 graphs the percentage of participants by type for the 2015 plan year from Figure 15

(combining the few Seriously Endangered zone status plans into the general Endangered zone 

status). Moving through the zones the proportion of inactive participants increases, particularly 

the proportion of participants in pay status. Green zone plans retain an average of 42 percent of 

the population as active workers, and just under one-third of the population is retired and in 

payment status. Moving to Critical & Declining status, the proportion of active workers 

decreases to 16 percent and the proportion of retirees to 52 percent. The more serious the funding 

issues, the higher, on average, the percentage of inactive participants, particularly of retirees in 

pay status.

Figure 16 - Average Percentage of Inactive Participants Grows as Plan Zone Status Worsens

Source: Plan Year 2015 Form 5500 Filings, Data reflects correction to zone statuses.

Figure 17 tests for statistically significant differences between zone statuses on the basis of the 

ratio of inactive to active participant counts. Plans in the Critical and Declining zone differ from 

plans in the Critical, Endangered and Green zone at the 5 percent level of significance (and at the 

1 percent and lower levels as well).

42% 38% 33%

16%

32% 37%

34%

52%

26% 25% 33% 32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Neither

Endangered nor

Critical

Endangered and

Seriously

Endangered

Critical Critical & Declining

2015 Distribution of Participant Status by Zone 

Active In Pay Separated Vested
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

26

Figure 17 - Likelihood that Inactive to Active Participant Ratio by Zone is due to Chance

All Plans, Ratio of Inactive to Active Participants

P-Values Critical & 

Declining Critical Endangered Neither Endangered nor Critical

Critical & 

Declining n/a 0.0004 <.0001 <.0001

Critical 0.0004 n/a 0.001 0.5255

Endangered <.0001 0.001 n/a 0.5337

Neither Endangered 

nor Critical <.0001 0.5255 0.5337 n/a

Source: PBGC Calculations Based on Plan Year 2015 Form 5500 Filings

Inactive to Active Participant Ratio

Based on the observation of statistically significant differences in the ratio of inactive to active 

participant by zone status, we created categories based on the inactive to active participant ratios 

and organized the data by zone. Figure 18 displays the plan, participant and orphan count by 

these categories.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

27

Figure 18 - Plan, Participant and Orphan Counts, by Inactive/Active Ratio and Zone (2015)

Ratio of 

inactive to 

active 

participants 

within plans

Overall 

Counts

Zone Status

Neither 

Endangered 

nor Critical

Endangered Seriously 

Endangered Critical Critical & Declining

Less than 1

Plans 185 160 20 - 5 - 

Participants 1,107,077 1,006,725 77,465 - 22,887 - 

Inactive 453,538 407,479 35,147 - 10,912 - 

Orphans 44,183 44,078 99 - 6 - 

1 <= x < 2

Plans 577 411 75 4 80 7 

Participants 5,883,370 4,028,952 736,731 21,039 1,009,502 87,146 

Inactive 3,480,155 2,385,824 430,551 12,237 594,937 56,606 

Orphans 551,771 474,723 26,049 - 41,751 9,248 

2 <= x < 5

Plans 354 183 48 1 86 36 

Participants 2,181,741 651,043 306,983 3,734 1,011,682 208,299

Inactive 1,606,373 468,452 219,372 2,549 754,369 161,631 

Orphans 516,940 41,547 16,283 - 405,931 53,179 

5 <= x < 10

Plans 61 20 2 - 11 28 

Participants 777,603 39,342 17,118 - 30,537 690,606 

Inactive 661,574 34,106 15,083 - 26,060 586,325 

Orphans 337,066 7,217 5,274 - 3,540 321,035 

10 <= x < 25

Plans 43 13 4 - 6 20 

Participants 283,869 17,326 9,441 - 19,299 237,803 

Inactive 263,764 16,320 8,649 - 17,759 221,036 

Orphans 134,807 8,466 - - 214 126,127 

25 <= x

Plans 29 10 - - 3 16 

Participants 44,319 16,737 - - 619 26,963 

Inactive 43,336 16,265 - - 610 26,461 

Orphans 11,801 6,867 - - 193 4,741 

Totals

Plans 1,249 797 149 5 191 107 

Participants 10,277,979 5,760,125 1,147,738 24,773 2,094,526 1,250,817 

Inactive 6,508,740 3,328,446 708,802 14,786 1,404,647 1,052,059 

Orphans 1,596,568 582,898 47,705 - 451,635 514,330 

Orphans as a 

% of Inactive 

Participants

25% 18% 7% 0% 32% 49%

Source: Plan Year 2015 Form 5500 Filings. Data reflects correction to zone status. Excludes plans reporting more orphans than total inactive participants

and plans currently receiving Financial Assistance and terminated plans currently booked by PBGC.

The analysis shows that:

 Green zone plans predominate in the classes of plans with lower ratios of inactive to 

active participants.

o 160 green zone plans have fewer inactive participants than active participants and 

411 plans have an inactive to active ratio of between 1 and 2. In combination 

these 571 plans represent 72 percent of the 797 green zone plans.
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

28

o Similarly, green zone plans with an inactive to active participant ratio of less than 

2 cover 87 percent of the 5.8 million green zone plan participants. 

 Plans in more troubled zone statuses tend to have higher ratios of inactive to active 

participants.

o Critical status plans are primarily clustered in plans that have an inactive to active 

participant ratio of between 1 and 5. 

o Critical & Declining status plans tend to have higher ratios of inactive to active 

participants than any other group.

 Over 30 percent of Critical Status inactive participants are orphans.

o This increases to 49 percent of Critical and Declining zone inactive participants.

o But only 18 percent of green zone inactive participants are orphan participants.

Figure 19 shows the distribution of the Inactive/Active ratio for Green, Red and C&D zones, 

across the ratio groups. 

Figure 19 - Plan and Participant Distributions, by Inactive/Active Ratio and Zone (2015)

Source: Plan Year 2015 Form 5500 Filings. Data reflects correction to zone statuses. Excludes plans reporting more orphans than total inactive participants.

Excludes plans currently receiving Financial Assistance and terminated plans currently booked by PBGC.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Plan distribution by Inactive to 

Active Ratio and Zone

Neither Endangered nor Critical

Endangered or Seriously Endangered

Critical

Critical & Declining

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Participant distribution by Inactive 

to Active Ratio and Zone

Neither Endangered nor Critical

Endangered or Seriously Endangered

Critical

Critical & Declining
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

29

The left pane of Figure 19 shows, for each zone status, the percentage of plans in that zone with 

inactive to active participant ratios of less than 1, 1 to 2, 2 to 5, 5 to 10, 10 to 25, and more than 

25 inactive participants per active participant.

For example, looking at Critical status plans, the left pane graph shows less than 5 percent of 

these plans have an inactive to active participant ratio less than 1, but that over 40 percent of 

critical status plans have inactive to active participant ratio between 1 and 2. In addition, over 40 

percent of Critical status plans have an inactive to active participant ratio between 2 and 5. The 

tendency of troubled zone status plans to have higher inactive to active participant ratios is seen 

in the shapes of the distributions.

The right pane of Figure 19 similarly shows the distribution of participants in plans with a 

particular zone by inactive to active participant ratio. Thus, for example, over 50 percent of 

participants in Critical and Declining zone plans are in plans that have an inactive to active 

participant ratio of between 5 and 10.

As shown in this chart, Critical and Declining plan participants, and to some extent Critical plan 

participants, tend to be in plans more burdened by legacy costs, regardless of delineation 

between being a traditional inactive participant vs. an orphaned participant. 

Conclusions

Overall, multiemployer plans are seriously underfunded, with about 130 projected to become 

insolvent within the next 15-20 years.17F

18 In summary, the analysis in this report indicates:

• 1.6 million (16 percent of) participants in ongoing multiemployer plans were identified 

by plan administrators as orphan participants in 2015. Due to reporting weaknesses, this 

should be considered an approximate measurement and as the lower end of the number of 

orphan participants in these plans. As demonstrated above, an estimated upper bound is 

2.5 million participants (24 percent).

• The concentration of orphan participants in plans varies by industry, with five industries 

(Agriculture, Mining, Manufacturing, Transportation/Utilities, and Leisure/Hospitality) 

reporting that 25 percent or more of participants are orphans.

• The orphan participant burden is significantly higher, when measured as the ratio of the 

number of orphans to the number of active participants, for plans in Agriculture and 

Mining (with ratios of 9.9 and 4.8, respectively).

• Construction industry plans report relatively few orphan participants in the Form 5500 

data. This may, in part, reflect industry dynamics, with less orphans than in most other 

industries. However, it is also partially due to the special rules defining a “withdrawal” in 

such plans, which may make the determination of orphan participants more difficult.

 18 https://www.pbgc.gov/sites/default/files/pbgc_testimony-joint_select_committee_on_solvency_of_multiemployer_plans5.17.2018.pdf
Orphan and Inactive Participants in Multiemployer Plans, 2015 Plan Year Reporting

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• Plans reporting a zone status of Critical or Critical & Declining have a much higher 

concentration of orphans than plans in the Green zone. 

• Plans with a higher ratio of inactive to active participants report being in Critical or 

Critical & Declining zone status with a higher frequency than other plans in the system.

• Reporting weaknesses with respect to orphan data are significant and appear to have 

increased somewhat over time. Small and medium size plans contain all instances of 

reports of more orphans than inactive participants and the frequency of blank and zero 

reports decreases with plan size. But plans of all sizes failed to report orphans following 

recent withdrawals. Even where otherwise plausible data is reported, trend analysis and 

interviews with experts indicate that the data must be viewed with some degree of 

skepticism. Improved data could drive more informed decisions on policy development 

affecting orphan participants.

• The data shows that the worse the zone status, the higher the concentration of orphans

and the higher the ratio of inactive to active participants. Both orphaned participants and 

inactive participants are concentrated in plans experiencing financial distress.