M3 - Retirement Benefits Other Than Pensions

Question 1

An overfunded single employer defined benefit plan should be recognized in classified statement of financial position as a:

Answer 1

Noncurrent asset

Overfunded pension plans, which represent that the FV of the plan assets is greater than the PBO, are reported as a noncurrent asset for balance sheet reporting purposes.

Question 2

The “attribution period” is the period of an employee’s service to which the expected post-retirement benefit obligation for that employee is assigned. (true or false)

Answer 2

true

Generally, the beginning of the period is the employee’s date of hire (unless the plan’s benefit formula grants credit only for service from a later date, in which case the beginning of the attribution period is generally the beginning of that credited service period). The end of the “attribution period” is the “full eligibility date.”

Question 3

An employer’s obligation for post-retirement health benefits that are expected to be provided to or for an employee must be fully accrued by the date the:

Answer 3

Employee is fully eligible for benefits.

Postretirement health benefits are accrued in a manner similar to pension benefits. The expected postretirement health benefits must be fully accrued by the date the employee is fully eligible for the benefits. The accrual will begin when the employee is hired through the eligibility (vesting) date.

Question 4

Per Capita Claims are unique to postretirement health care benefits. (true or false)

Answer 4

True