Funding ratio up to 104.0%
The pension funds’ funding ratio went up 5.8 percentage points, to 104.0% at the end of the fourth quarter (see Figure 1). The funding ratio reflects a pension fund’s current financial position, expressing the ratio between available assets and liabilities.
By contrast, the policy funding ratio fell by 1.1 percentage points to 102.2%. The policy funding ratio is the average of the funding ratios for the past twelve months. It fell because the funding ratios in the fourth quarter of 2019 were lower than those in the fourth quarter of 2018. The minimum statutory required policy funding ratio differs for each pension fund, but in almost all cases hovers around 104.2%.