Pension plan whose assets are insufficient to cover the value of promised retirement benefits under current assumptions.
An underfunded pension plan is a pension plan whose assets are insufficient to cover the value of promised retirement benefits under current actuarial and financial assumptions.
It matters because underfunding exposes workers, retirees, employers, and sometimes governments to higher contribution pressure, benefit risk, and fiscal stress.
Pension Funding Gap
Pension Liability
Funded Pension Plan
Pension Benefit Obligation (PBO)")