What is Funding Ratio?
Funding Ratio The ratio of a pension fund's assets to its liabilities, indicating the plan’s ability to meet future obligations.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Funding Ratio” Used in Practice?
A funding ratio above 100% suggests that a pension fund’s assets exceed its projected liabilities.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Funding Ratio?
The ratio of a pension fund's assets to its liabilities, indicating the plan’s ability to meet future obligations.
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