Fully funded

A fully funded pension plan has a sufficient amount of assets associated with it to pay for all accrued benefits. Full funding is only possible if the sponsoring employer pays a sufficient amount of funds into the plan, and the plan then earns an adequate return on the funds over time. A fully funded plan is somewhat unusual – many employers contribute an insufficient amount of funds to their pension plans, so there is always a gap between the required and actual level of funding.

Related Courses

Accounting for Retirement Benefits