Unfunded pension plan

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 ?
But one of LTD's most vocal critics said the district's outlook is dire given unfunded pension plan liabilities and the cost to add the west Eugene EmX route.
Credit rating agency Moody's has upgraded British Airway's bonds to Baa3, citing the improvement in the company's operating performance in spite of volatile earnings, and the beginning of the company's plan to reduce its significant unfunded pension plan.
It also provides added assurance to taxpayers that they won't be left responsible for paying pension promises by instituting a termination premium of $1,250 per participant if a plan sponsor terminates an unfunded pension plan.
4 billion unfunded pension plan and payments to IPPs for capacity availability over the next 25 years.
With that objective in mind, and having reached a preliminary agreement in principle with the Pension Benefit Guaranty Corporation (PBGC) for the settlement of the company's unfunded pension plan liabilities, we filed a prospectus with the Securities and Exchange Commission on May 14, 1992, detailing the company's plan to restructure its debt through a Prepackaged Plan of Reorganization under Chapter 11.
May 15 /PRNewswire/ -- New Valley Corporation (NYSE: NVL) announced today that it has reached an agreement in principle on key terms with the Pension Benefit Guaranty Corporation (PBGC) for the settlement of its unfunded pension plan liabilities.
In unfunded pension plans, the sponsoring employer sets aside money for payment of benefits in the period the money is disbursed to the retiree.