Solvency

1. The ability of an entity to pay its liabilities as they fall due, in the short, medium and longer term.

2. Pensions. The extent to which the assets of a defined benefit pension scheme are sufficient to meet the liabilities and thus closely related to funding level. Liabilities, and thus solvency, may be calculated on a discontinuance or a going concern basis for the scheme concerned.

See also

• Discontinuance
• Insolvency
• Liquidity