The little-noticed passage by Congress of relief for multi-employer pension plans as well as President Obama’s signature on the bill on June 25 provide much-needed breathing room for these types of union pension funds.

The bill, paired with measures related to Medicare benefits, allows the plans to amortize losses sustained in the stock-market downturn of 2008 over 30 years rather than the previous limit of 15 years. By allowing the longer period of amortization, Congress and the President temporarily remove the possibility that multi-employer plan assets will slip further behind their future liabilities and require even more drastic relief measures.

The relief measure masks deeper problems with these employer worker-funded portable plans, which cover many unionized construction workers. According to Moody’s Investor Services, the funded status of such construction industry plans is only 54%, about the same as food, supermarket and transportation worker funds.

With an aging workforce, stagnant and historically low union membership levels and recession-rocked employers, the outlook is not good. The possible outcomes include a combination of bigger contributions from employers and workers and cutbacks in benefits for both current and retired workers—an unhappy experience for all concerned, particularly for retirees.

We believe it’s time for some big changes in the way these plans are administered, and we think an early indication of change can be spotted in a report by the Pension Management Research Panel, which is run by SEI, an Oaks, Pa.-based pension management and financial consultant. The panel reported that multi-employer trustees are paying greater attention to plan liabilities, seeking more investment diversification and concentrating more on the investment process. On the other hand, it’s worrisome to hear that trustees are resorting to hedge funds as investment alternatives to the traditional stocks and bonds and that many plan trustees had not changed investment managers in five years.

The good news is the focus on the plans’ liabilities. According to SEI’s panel, this means the focus has shifted away from traditional ways of investing to ones designed to keep the plans from slipping further.