Unfunded pension plan

(redirected from Unfunded Pensions)

Unfunded pension plan

Provides for the employer to pay out amounts to retirees or beneficiaries as and when they are needed. There is no money put aside on a regular basis. Instead, it is taken out of current income.

Unfunded Pension Plan

A pension plan where a former employer pays pensioners out of current income. That is, the employer does not place money aside or invest funds on a regular basis to finance the pension. Obviously, an unfunded pension carries higher risk for both the pensioner and the employer; if the company goes through a difficult period, the pensioner may not have a pension for all his/her retirement while the employer has higher current liabilities.
References in periodicals archive ?
Excluded from this PS25,000 are debts related to unfunded pensions, student loans and PFI (private finance initiative widely adopted in building of hospitals and schools).
And, for the first time, specific figures have been collected for municipal unfunded pensions obligations totaling in excess of $25 billion, almost a quarter of debt countywide.
We knew that debt and unfunded pension obligations were serious problems at the state and federal level and assumed that a similar pattern would follow at the local level.
After reviewing that information, Pappas went back to the County Board in January and asked for an amendment requiring these governmental units to report, for the first time, their pension liabilities and their unfunded pension liabilities.
He has a wide range of financial planning experience through working closely with sister company Punter Southall & Co, a consulting actuary, on technical issues, advising on areas such as unfunded pensions arrangements, executive severances, and more recently pensions A-day planning.
A balanced budget has occurred only because they are using the Social Security surplus payments from the Baby Boomers as if it were general tax revenue instead of unfunded pensions.
Many of the continental countries have large debts, as well as massive unfunded pensions liabilities.