Unfunded Vested Benefits (UVBs)

Definition

The difference between the present value of all pension benefits that participants have earned and cannot lose (non-forfeitable benefits) and the current value of the plan's assets. When UVBs are positive, the plan doesn't have enough money to cover all promised benefits, and this shortfall forms the basis for withdrawal liability.

Examples

• •The plan's UVBs increased dramatically when the actuary lowered the discount rate from 7.5% to 6.5%, because the lower rate increased the calculated present value of future pension payments.

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