Pensions

Question 1

What is a projected benefit obligation (PBO)?

Answer 1

Reflects future comp levels

Question 2

What is a accumulated benefit obligation?

Answer 2

PV of pension benefits accrued based on present comp levels.

Question 3

PRUIS Pension Expense Calculation

Answer 3

Prior service cost amort.
- return on plan assets (est.)
\+ interest (beg. PBO x int. rate)(>PBO due to time)
\+ unexpected losses or (-) gains
\+ service cost (as employee works, >PBO)

Question 4

What are the characteristics of the FV or Plan Assets - PBO?

Answer 4

Overfunded (asset) - non-current only
Underfunded (liability) - current and non
G/L recorded in OCI (net of tax)

Question 5

Required disclosures

Answer 5

Pension funding policies
Types of assets held
5 yr. benefits to be paid
5 yr. benefits in aggregate thereafter
Est. Pension contribution for next period

Question 6

Vested benefits

Answer 6

Owed to employee regardless of continuance of employment via the full eligibility date.