The funding ratio is the ratio between the amount of the assets we hold and our pension liabilities. The assets consist of the contributions we receive and the return we generate from our investments. The liabilities are the pensions we have to pay, both now and in the future. The amount of the liabilities depends (among other things) on the level of interest rates and life expectancy.
Two types of funding ratio:
- the monthly nominal funding ratio, which is the current funding ratio in the month in question;
- the policy funding ratio, which is the average funding ratio over the past 12 months.
|Date||Policy funding ratio||Nominal funding ratio|