Unfunded pension plan

(redirected from Unfunded Pension)

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 ?
However, pension plan members may also be at risk if there is an unfunded pension liability and the employer company fails.
New Jersey's unfunded pension obligation stands at nearly $100 billion and was the source of 11 credit downgrades under the Christie administration.
They inherited the state's existing level of total bonded indebtedness, which was $3.8 billion on June 30, 2011, and the existing unfunded pension liability at PERS, which was $12.3 billion.
Unfunded pension debt across the 50 states totals a staggering $1.6 trillion, even by the plans' own (often overly rosy) accounting.
Unfunded pension liability included in financial leverage is not expected to be a primary driver of rating changes.
"The imposition of a new unfunded pension liability will swing a wrecking ball through the already difficult budget plans for 2019 and the following years.
The Office for National Statistics: 'Central and local government have unfunded pension liabilities of PS5.3 trillion, 279% of GDP.'.
Unfunded pension liabilities and absence of any contribution by pensioners remain the biggest reasons behind this phenomenon, with annual budgetary provisions picking the pension bill.
Michiganders can view and compare local government revenues and expenditures, as well as long-term debt and unfunded pension liability costs.
Sears also owes a minimum $596 million in pension contributions for 2016 and 2017 combined, and has a total unfunded pension and post-retirement obligation of$2.1 billion, according to Moody's.
Bank Leumi said that calculation of the capitalisation interest on liabilities for first generation employees at the bank entitled to an unfunded pension would be conducted according to the average yield during the past eight quarters on government bonds, plus the spread of the yields on AA-rated corporate bonds in the US.
The transaction value is subject, at closing, to reduction for certain underfunded and unfunded pension obligations and further adjustment for cash, indebtedness of the business, and variation, if any, of working capital versus a targeted amount.