Percent funded is best described as which measure?

Percent funded is best described as which measure?

• A. Size of reserve account relative to a fully funded reserve balance
• B. Current year operating deficit
• C. Proportion of the reserve funded toward its fully funded target
• D. Total reserves currently on hand

Answer: (C)

Percent funded shows how much of the long‑term reserve goal has actually been funded relative to the amount needed to be fully funded. It is a measure of progress toward the funding target for future major repairs and replacements, not just how large the current reserve is or whether there’s a current operating deficit. For example, if the fully funded target is $1,000,000 and you have $600,000 funded, the percent funded is 60%. This helps the board see how close they are to being fully funded and decide if contributions need to be increased or the funding plan adjusted. The current operating deficit speaks to day-to-day finances, and total reserves on hand doesn’t indicate progress toward the future funding goal, whereas the proportion funded toward the fully funded target directly reflects readiness for future needs.

Percent funded shows how much of the long‑term reserve goal has actually been funded relative to the amount needed to be fully funded. It is a measure of progress toward the funding target for future major repairs and replacements, not just how large the current reserve is or whether there’s a current operating deficit. For example, if the fully funded target is $1,000,000 and you have $600,000 funded, the percent funded is 60%. This helps the board see how close they are to being fully funded and decide if contributions need to be increased or the funding plan adjusted. The current operating deficit speaks to day-to-day finances, and total reserves on hand doesn’t indicate progress toward the future funding goal, whereas the proportion funded toward the fully funded target directly reflects readiness for future needs.