Pensions

Question 1

Two Types of pension plans

Answer 1

Defined Benefits and defined contributions

Question 2

Two non Gaap methods

Answer 2

Pay as you go and terminal funding

Question 3

Types of Pension Plans

Answer 3

VBO- Vested benefit obligations. Means what the employee gets if he terminated immedietly.
ABO-Accumulated benefit obligation- What is owed if the employee continues in employment until normal retirement age at current wage rates. Employee services and compensation prior to that date.(If youquit today what we owe you)
PBO- What is owed for service to date if the employee continues in employment under normal retirement age under general inflation based future wage rates
This is determined under benefits of years service method.

Question 4

Assumptions made by actury

Answer 4

Salary
Life expectancies
Turnover
Years employed
Cost of administering the plan

Question 5

Pension pneumonic- A- Spider

Answer 5

A- Amortization
S-Service Costs
P-Prior Service Costs
I-Interest 
D- Deferred Gain
E- Excess Amortization
R- Return on planned asset
A-Spider
\+-+++++--

Question 6

What is your target pension cost

Answer 6

Your ending PBO minus the Ending fair value of planned assets

Question 7

Discount rate or settlement rate

Answer 7

same

Question 8

Unamortized prior pension gain

Answer 8

Compare it with beginning PBO and Beginning fair value of pension plan assets take ten percent of bigger value minus it with biiger one divide it by ave svc years