Funding level

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Pensions.

The relationship at a specified date (often the valuation date) between the value of the assets and the value of the liabilities of a defined benefit pension scheme, often expressed as a ratio (the ‘funding ratio’).

The funding level is frequently expressed as a percentage.


Example

Assets = £100m

Liabilities = £90m

The funding level is:

90 / 100

= 90%.


(Not to be confused with the deficit, which in this example is 100 - 90 = £10m.)


See also