The funded ratio is a financial metric used to assess the financial health of a pension plan by comparing its assets to its liabilities. A funded ratio above 100% indicates a surplus, while a ratio below 100% suggests a deficit, potentially requiring additional contributions to meet future obligations.

Funded Ratio

Financial metric

Financial health refers to the state of one's personal financial situation, encompassing the ability to manage expenses, save for future goals, and withstand financial shocks. It is a comprehensive measure that includes income, expenditure, savings, investments, and debt management, indicating overall financial stability and security.

Financial Health

A pension plan is a retirement savings vehicle that provides individuals with a fixed income upon retirement, often funded by both employer and employee contributions. It is designed to ensure financial security in retirement, with benefits typically determined by factors such as years of service and salary history.

Pension Plan

Assets are resources owned by an individual or entity that hold economic value and can be converted into cash. They play a critical role in determining the financial health and operational capacity of businesses and individuals, influencing investment decisions and financial planning.

Assets

Liabilities represent a company's financial obligations or debts owed to others, which are typically settled over time through the transfer of economic benefits such as money, goods, or services. They are a critical component of the balance sheet and are used to assess a company's financial health, risk, and leverage.

Liabilities

Surplus refers to the amount of an asset or resource that exceeds the portion that is actively utilized or required, often leading to a decrease in value or price due to oversupply. It plays a critical role in economics and business, influencing market dynamics, pricing strategies, and resource allocation decisions.

Surplus

A deficit occurs when expenses exceed revenues, leading to a shortfall that must be covered through borrowing or other financial mechanisms. It is a critical economic indicator that can affect a country's fiscal policy, interest rates, and overall economic health.

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