Underfunded pension plan

(redirected from Under-Funded Pension Plans)

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 ?
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.