The annual funding notices that U.S. defined benefit plan sponsors are required to send their participants contain a huge amount of information, some of which is contradictory. So even with a wealth of data at their fingertips, it is difficult for individuals to really understand the funded status of their plans. In order to get a clear picture of a plan’s status, it is important to understand which components are being used in the measurement and what implications a particular funded status may have for participants. This article outlines the many different funded status measurements that are used for U.S. pensions.
This article was published in the May 2013 issue of International News, a Society of Actuaries publication.