TEST OF SHORT-RANGE FINANCIAL ADEQUACY

The conditions required to meet this test are as follows: (1) If the trust fund ratio for a fund exceeds 100 percent at the beginning of the projection period, then it must be projected to remain at or above 100 percent throughout the 10-year projection period; (2) alternatively, if the fund ratio is initially less than 100 percent, it must be projected to reach a level of at least 100 percent within 5 years (and not be depleted at any time during this period), and then remain at or above 100 percent throughout the rest of the 10-year period. This test is applied to trust fund projections made under the intermediate assumptions.

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