Two sets of ratios are shown in the schedule of funding progress prepared for Pension Trust Funds: (A)the funded ratio;and (B)the unfunded actuarial accrued liability as a percentage of covered payroll.The financial status of the pension fund is said to be improving when:

Question

Quizplus · Accepted Answer

If the funded ratio (A) increases and the unfunded actuarial accrued liability as a percentage of covered payroll (B) decreases over time, it means that the pension fund has more assets to cover its liabilities, and its financial status is improving. A decreasing funded ratio and an increasing unfunded actuarial accrued liability would indicate the opposite - a worsening financial status. A and B moving in the same direction (either both increasing or both decreasing) doesn't necessarily give a clear indication of whether the pension fund is improving or worsening.

Two Sets of Ratios Are Shown in the Schedule of Funding