Test of short-range financial adequacy

Conditions required to meet this test as follows: (1) If the trust fund ratio for a fund exceeds 100% at the beginning of the projection period, then it must be projected to remain at or about 100% throughout the 10-year projection period; (2) alternatively, if the fund ratio is initially less than 100%, it must be projected to reach a level of at least 100% within 5 years (and not be depleted at any time during this period) and then remain at or above 100% throughout the rest of the 10-year period. This test is applied to trust fund projections made under the intermediate assumptions.

Leave a Reply

Your email address will not be published. Required fields are marked *