Underfunded pension plan

(redirected from Under-Funded Pension Plan)

Underfunded pension plan

A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
McClatchy said in a statement that it would use the most of the proceeds from the deal -- $163 million -- to help refresh its under-funded pension plan and another big chunk -- $65 million -- to holders of 2017-maturity bonds.
Carney said last week that the company was imposing its offer because it was a good one: a one-year contract with a 1 percent wage increase, a 1 percent signing bonus and a one-time $1.2 million company contribution to the under-funded pension plan. In return, union members would pay 25 percent of their health insurance premiums; and 9.5 percent of their pension, a 1 percent increase over the current payment.
This means that its under-funded pension plan obligations have been transferred to the federal insurer with a significantly reduced payout to retirees.
Does an under-funded pension plan simply reflect poor recent performance of the stock market, or does it represent a serious long-term liability?
The company also would make a one-time $1.2 million payment to the under-funded pension plan while employee contributions would increase by 1 percent so they equal the company's contribution of 9.5 percent.
In an effort to shore up under-funded pension plans, the Lane Transit District board has voted unanimously to adopt a less expensive plan for administrative employees who are hired after Jan.
These losses directly affected AFSCME members through under-funded pension plans and the need for increased employer contributions.
Almost every week in the media, there is an article about under-funded pension plans and looming labour shortages.
Companies with under-funded pension plans are prevented from promising extra benefits to employees without paying for those promises up front.
Corporate profits and cash flows continue to be adversely affected by employee health insurance premiums, which rose 14.8 percent last year, and under-funded pension plans, which stand at a $216 billion deficit for the S&P 500 companies.