What funded status triggers mandatory additional contributions under PPA?

Under PPA 2006, plans with funded status below 80% enter endangered status, requiring a funding improvement plan. Plans below 65% are in critical status, requiring a rehabilitation plan. Plans in critical status face restrictions on benefit increases and lump sum payments.

How do interest rate changes affect pension funded status?

A 1% decrease in discount rates typically increases PBO by 10–20% (depending on duration), causing funded status to deteriorate significantly. Plans using liability-driven investing (LDI) hedge this by matching asset duration to liability duration, making funded status more stable.

Pension Funded Status Deficit Percent

Calculate pension funded status as plan assets minus PBO, expressed as a percentage, and assess funding deficit implications for required contributions under ERISA and PPA 2006.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate pension funded status as plan assets minus PBO, expressed as a percentage, and assess funding deficit implications for required contributions under ERISA and PPA 2006. Use the pension funded status result to inform your calculation.

Related Calculators

Pension PBO

Finance Long-tail

Pension ABO