Glossary
Funding Ratio
The Funding Ratio is the key indicator of a Pension Fund's financial health. It measures the fund's available assets against the actuarially required liabilities. A Funding Ratio of 100 per cent means the fund can fully cover its obligations.
At a glance
01
Funding Ratio equals pension assets divided by actuarially required liabilities (BVV2 Art. 44).
02
Below 100 per cent there is an underfunding; the fund must then examine remedial measures.
03
A Funding Ratio above 100 per cent builds up fluctuation reserves to absorb poor investment years.
Frequently asked questions
An underfunding means that the Pension Fund's assets do not arithmetically cover the insured liabilities at a given reference date. This is not automatically alarming, but it obliges the fund to examine whether and which remedial measures are necessary, such as a lower credited interest rate or remediation contributions.
Part of the topic
Vorsorge & Pensionierung
Sources: Bundesamt für Sozialversicherungen (BSV) · Systematische Rechtssammlung (fedlex)