Advance funded pension plan

Advance funded pension plan

A pension plan in which funds are set aside in advance of the date of retirement.

Advance Funded Pension Plan

A pension that has sufficient liquid assets to pay all of its liabilities, including (and especially) all future payments to beneficiaries, because the sponsoring employer periodically sets aside funds to ensure the pension's financial health. This presents the least risk to both the sponsoring employer and pensioners. See also: Unfunded pension plan.