What causes the unfunded liability?

Unfunded liability is created when a benefit is provided and the appropriate employer and employee contributions (and corresponding investment return) needed to fund the cost of the benefit are not paid. Assume for example that you are an employer with two employees. Employee A has worked for you for 18 years, and Employee B has worked for you for 6 years.

You have no pension plan in place, but you have opted to start one. More.

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