The most likely explanation for the discrepancy between pension expense and cash funded is that the company has underfunded its pension plan. This means that the company has not contributed enough to the plan to cover all of its employees’ future pension benefits.
The difference between the pension expense and cash funded amount is the amount that the company has not yet funded. This can happen when a company underestimates the expected rate of return on its investments and underestimates the amount of money that its employees will receive in pension benefits. Companies should regularly review their pension plans in order to ensure that they are adequately funded in order to meet their obligations.
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