Pensions Flashcards
What is a Rabbi Trust
Provides benefits that is not taxable to the recipients until some later date when they actually receive compensation. Can only be used as payment of the employer’s creditors in a bankruptcy, and as payment of the employer’s future compensation.
Statement of Net Assets available for benefits of an employer benefit plan must include:
Total assets, Total Liabilities, net assets reflecting all investments at fair value, net assets available for benefits
How can you tell if a pension plan is underfunded or over funded
Compare the Projected Benefits Obligations to the Fair Value of the plan assets.
If PBO > FV, recognize a liability.
If PBO < FV, recognize an asset
What makes up pension expense?
Service cost, amortization of unrecognized prior service cost, and interest cost
What financial statements must by filed by employee benefit plans and trusts?
Statement of net assets available for benefits of the plan as of the end of the plan year
Statement of changes in net assets available for benefits of the plan for the year then ended.
