These pages discuss reserve study funding topics including Percent Funded and reserve fund interest calculations.
If you are unfamiliar with Percent Funded (PF) and how it is calculated, first read the Fully Funded Balance (FFB) page. Percent Funded is derived from the Fully Funded Balance, so it is important to first understand how the Fully Funded Balance works before exploring Percent Funded.
Fully Funded Balance
The Fully Funded Balance is an idealized reserve fund balance to which the actual reserve fund balance is compared. Fully Funded Balance understanding is a prerequisite to understanding Percent Funded. Read more here.
Percent Funded is a reserve fund status indicator. Percent Funded is a comparison between the reserve fund’s actual balance and an idealized balance know as the Fully Funded Balance. Read more here.
Percent Funded Considerations
Fully Funded Balance and Percent Funded concepts are simple, but their results are all to often misleading. Unfortunately, these misleading results lead to misguided decisions. Read more here.
Which Percent Funded Status is Better: Poor, Fair or Strong?
The obvious answer is not the correct answer. See the unexpected answer here!
Identical Reserve Work, but Different Percent Funded Values?
Identical work does generate different Percent Funded values. See how and just how big a difference here!
Reserve Fund Interest
Most reserve accounts earn interest income which is integral to the reserve funding plan. Interest earning calculation including possible taxes impact the reserve account’s bottom line. The interest calculation method is a common question. Read more here.