Unallocated Funding Instrument
Definition of "Unallocated funding instrument"
Pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds of one plan can not be commingled with funds of another plan, and the plan trustee guarantees neither principal nor interest of the funds deposited. At retirement the trustee can either purchase an immediate retirement annuity for the retiring employee or pay the benefits directly from the fund as they become due.
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