Underfunded pension plan

(redirected from Underfunded Pension Plans)

Underfunded pension plan

A pension plan that has a negative surplus (i.e., liabilities exceed assets).

Underfunded Pension Plan

A pension plan that has more liabilities than assets. That is, the retirees covered under the pension plan have been promised more than the plan contains. This may happen for a variety of reasons, such as the pension's investments not going as expected, or perhaps retirees are living longer than expected. It can lead to bankruptcy, though some pension plans have government guarantees.
References in periodicals archive ?
New York: A wide ranging proposal to address Kentucky's underfunded pension plans could gradually improve the commonwealth's credit as large and growing pension obligations have been one of its key rating challenges, Fitch Ratings says.
Moreover, underfunded public pension plans have factored into resolutions of a number of recent, large municipal bankruptcies and it is likely that future municipal bankruptcies will also involve, in one way or another, underfunded pension plans.
Local officials may interpret state aid as a signal that states will come to the rescue of underfunded pension plans (Inman 1982, 64; Novy-Marx and Rauh 2011, 56).
Eltife raised concerns about shoring up underfunded pension plans and putting more resources into transportation and higher education.
Significantly underfunded pension plans require additional cash contributions and the amortization of pension losses, tempting managers to opportunistically increase the ERR.
In exchange, Detroit would get millions to bolster its two underfunded pension plans, one for police and firefighters, the other for general city workers.
And a number of large companies have had to make sizable contributions to their underfunded pension plans over the last couple of years.
In 2012, 155 underfunded pension plans terminated, with the PBGC stepping in to cover their benefit promises.
Forces within and beyond LTD's control have left the district with underfunded pension plans.
5bn to its underfunded pension plans for each of the next two years, the automaker is likely to start issuing dividends by 2012.
The request comes after a group of major employers asked Ottawa to double the amount of time allowed to top up underfunded pension plans to 10 years and to use a method of calculation that would reduce the size of reported deficits.