Minimum funding requirement

 

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Minimum funding requirement

A rule introduced in the wake of the Maxwell pensions scandal which was intended to ensure that company pensions funds always had enough assets to pay out their liabilities (i.e. pensions to retired members of the scheme).The legislation uses the yield from long term gilts as the yardstick by which a pensions fund's liabilities are measured. To stay within the rules, funds have felt obliged to buy these long-term bonds, with the result that their price has gone sky high.One alternative being considered is to change the whole way liabilities are valued and, in effect, to allow the funds to invest in more exciting securities than gilts, but to couple this with an insurance fund that bails out those funds that are unable to meet their liabilities. This insurance fund would be called the Central Discontinuance Fund (CDF).



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See 'Public Sector Net Cash Requirement (PSNCR)'.


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A requirement that an importer or exporter achieve some level of performance, in terms of exporting, domestic content, etc., in order to obtain an import or export license.


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The amount of cash an uncovered (naked) option writer is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intraday price changes.


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Requirement Indicator Matrix
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