The phrase
"funded ratio" refers to a percentage that helps measure the financial health of a particular entity, typically a pension fund or retirement plan. It compares the value of the assets that the entity has set aside to pay for future obligations (such as pension payments) with the total value of those future obligations. A higher
funded ratio indicates that the entity has enough money to meet its future financial commitments, while a lower
funded ratio suggests the entity may have a shortfall or be at risk of not being able to honor those commitments.
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