# The Dynamic Reserve Ratio The share of each member’s contribution that goes to each reserve is set by the Dynamic Reserve Ratio. Set at 40% at inception (meaning 40% of net contribution goes to the Fund Reserve, and 60% to the Benefits Reserve), the algorithm checks if the Fund Reserve remains at a sufficient level to protect the longevity of the fund. The algorithm checks whenever a new contribution is made, if the share it allocates to the Fund Reserve needs to be increased, then the share allocated to the Benefits Reserve is decreased as a result. Changing the share of the net contribution going to the Fund Reserve does not change a member’s Benefit Multiplier, but makes sure reserves are ‘earned’ at a slower average rate, since the Fund Reserve is only earned with a 1-year delay compared to the Benefit Reserve (see next section). It also has some effect on the BM.A, since only 70% of the Fund Reserve is taken into account in methods 1 and 3, while the Fund Reserve is not taken into account for method 2. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.takadao.io/takadao-docs/part-b.-takadao-the-daos/04-underwriting-and-risk-management-algorithm/dynamic-underwriting-reserves/the-dynamic-reserve-ratio.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.