Advanced Funded Pension Plan

AAA

DEFINITION of 'Advanced Funded Pension Plan'

A pension plan that is funded concurrently with the employee's accrued benefits, such that the funds are set aside well before the employee's retirement. Advanced funded pension plans are generally defined contribution plans, and are fully funded. They can be funded by the employer alone, or by some combination of the employer and the employee.

INVESTOPEDIA EXPLAINS 'Advanced Funded Pension Plan'

In contrast to an advanced funded pension plan, an unfunded pension plan uses actuarial assumptions to determine the periodic contributions it makes to the plan. Defined benefit plans are more difficult to fund in advance because there are so many variables in computing the funding necessary to produce the benefit.

RELATED TERMS
  1. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
  2. Pension Fund

    A fund established by an employer to facilitate and organize ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  5. Capital Expenditure (CAPEX)

    Funds used by a company to acquire or upgrade physical assets ...
  6. Self Invested Personal Pension ...

    A tax-efficient retirement savings account available in Great ...
Related Articles
  1. Retirement

    An Overview Of The Pension Benefit Guaranty Corporation (PBGC)

    Find out how this "retirement lifeguard" can save drowning plans, and why it's unlikely to be a long-term solution to the pension problem.
  2. Retirement

    Keeping Track Of Retirement Plan Assets

    Maintain records of your pension benefits or risk losing them.
  3. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  4. Budgeting

    The Demise Of The Defined-Benefit Plan

    Experts are making bleak predictions for your post-work years. Be prepared and plan for your future.
  5. Taxes

    The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
  6. Taxes

    How To Use Your IRA As A Last-Minute Tax Deduction

    While some people are stressing over their taxes, there is a big advantage to delaying the process: You can maximize your 2014 contributions to your IRA.
  7. Retirement

    Best IRA Accounts For Beginners

    Opening your first IRA should be just an early step in your ongoing financial education, for the more help you need, the higher fees you're likely to pay.
  8. Retirement

    How (And Why) To Open an IRA Now

    Take these simple steps to set up an Individual Retirement Account that will save you tax money and set you up for the future.
  9. Professionals

    Tips for Gen X Savers at Age 50

    This is the time to stop and take a careful assessment of where Gen X savers are and see what changes they need to make to achieve their financial goals.
  10. Investing

    Rethinking About Retirement Investing?

    There are plenty of reasons to rethink your retirement investing, wherever you fall on the spectrum between fatalistic acceptance and cheerful confidence.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center