An estimated 114 multi-employer pension plans covering more than 1.3 million people are underfunded by more than $36 million and are expected to become insolvent in the next two decades, according to a new report.

The plans cover just 8 percent of the more than 1,400 such plans in the U.S. However, Cheiron, the Virginia consulting company that released the study, warns that the spillover effect from the failing plans could be bad for the rest of the country.

"Traditionally, participants in healthy multi-employer pension plans have been forced to pay for the guaranteed benefits of retirees and their families in failed plans," said Joshua Davis, a principal consulting actuary at Cheiron. "If this happens again, it will push other plans into insolvency with terrible consequences for communities across the country."

Multi-employer plans involve several companies and unions jointly managing a pension fund for all of the workers. The plans are favored by unions because they remain with the workers even if they switch jobs. However, they can be risky for businesses because if one employer goes bankrupt, the others are legally obligated to cover its contribution. Reports of the financial woes of some plans have prompted many companies to try to get out of the system. In 2006, the United Parcel Service paid $6.1 billion to pull out of the drastically underfunded Teamsters' Central States plan.

Cheiron notes that three plans — the Teamsters' Central States, the Bakery and Confectionary Workers Union, and the United Mine Workers — account for $22.8 billion, about 62.5 percent, of the unfunded liability. Those plans cover 603,000 participants.

In a rare example of bipartisan unity, the Republican-led Congress passed and former President Barack Obama signed the union-backed Multiemployer Pension Reform Act in late 2014. Few people were eager to tout the reform, however, since its chief function was to allow businesses to cut back benefits in the plans if necessary to prevent the plan's insolvency, a move that was previously illegal. The 2014 reform also required regular reports to Congress on the solvency of the Pension Benefit Guaranty Corporation's program, which steps in to provide plan recipients with payments if their own plan becomes insolvent.

The PBGC is in bad shape itself, having announced that its program to cover multi-employer plans is expected to run out of money in 2025. "Absent changes in law or additional resources, this year's report projects that the Multiemployer Program's [fiscal] 2016 deficit of $59 billion will increase, with the average projected deficit (looking across multiple economic scenarios) rising to almost $80 billion (in nominal dollars) for [fiscal] 2026," the PBGC reported this month.