Can anyone please clarify what's the difference between just in time funding and terminal funding? Is it that just in time funding only applies for when the sponsor is in trouble e.g. bankrupcy?? Thanks.
Hi, The main difference is that just in time funding is triggered by an outside event (e.g. sponsor insolvency) not a benefit event (e.g. the pension becoming payable). Terminal funding is the last point at which the sponsor can fund for the benefit event before it becomes payable. Hope this helps
What would happen if (under just in time funding) the benefit becomes payable? Would it be run as a PAYG or would funds be set aside at the time of the first payment becoming payable?
Hi Teeny If, under just in time funding, the external event does not happen, the funding for the actual benefit itself could be either terminal funding or PAYG. Anna
