Plan funded status

CFA Level III
#1

can someone explain this statement
if plan funded status is surplus then lower employer contributions so higher liquidity need

#2

Pension plans get liquidity from two sources:

  • Employers contribute cash (liquidity)
  • Portfolio supplies liquidity

If the former decreases, the latter has to increase to cover the difference.

#3

Thank you Bill.

#4

My pleasure, George!