Overfunding

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Overfunding

1. Describing any investment, annuity or other financial instrument containing more assets than liabilities. That is, contributions and the investment of those contributions amount to more than what the instrument owes to holders. This is considered a sign of financial health for the instrument.

2. In the United Kingdom, the practice of lending more government securities than the government is expected to need to fund its activities. The excess is used to fight inflation.
References in periodicals archive ?
Instead of being forced to overfund then for the inevitable downturns in this cyclical industry, the airlines were allowed to let the indebtedness to their pension plans grow so big that it became extremely difficult to repay when times got bad again.
5% and a required annual premium of $5,750, but she overfunds the policy by paying $8,500 until age 55, she could borrow $65,000 a year against the policy from age 65 to 85, says Williams.
The ability to make use of the overfunds will accrue to both sets of stockholders and will make Allegheny Ludlum a stronger competitor.