Compensation and Benefits
But What If a Pension Fund is Overfunded?Download
Currently, the consensus is that if a pension fund is less than 100 percent funded, it is underfunded. In other words, if the pension fund does not presently have all the assets needed to pay liabilities in the future (and without consideration of future contributions to the pension fund), the pension fund and retiree benefits are theoretically imperiled. So, out of concern for “underfunded” pension funds, of which there are many, there have been innumerable research papers, news articles, and worried finance directors.
But what if a pension fund is overfunded? Scarcely a word. While the number of pension funds that are underfunded outnumber those that are overfunded, more than a word or two should be spared for the topic.
- Publication date: April 2023
- Author: James L. Tatum III