17 Ch. 17 - Pensions - Pensions OPEBs Chapter 17 Click to...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style Chapter 17 Two questions to answer: 1. What is the pension obligation that a company should report in the financial statements? 2. What is the pension expense for the period?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 1. Explain the fundamental differences between a defined contribution pension plan and a defined benefit pension plan. 2. Distinguish among the accumulated benefit obligation, the vested benefit obligation, and the projected benefit obligation. 3. Describe the five events that might change the balance of the PBO. 4. Explain how plan assets accumulate to provide retiree benefits and understand the role of the trustee in administering the fund. 5. Describe the funded status of pension and other postretirement benefit plans and how that amount is reported. 6. Describe how pension expense is a composite of periodic changes that occur in both the pension obligation and the plan assets. 7. Record for pension plans the periodic expense and funding as well as new gains and losses and new prior service cost as they occur. 8. Understand the interrelationships among the elements that constitute a defined benefit pension plan. 9. Describe the nature of postretirement benefit plans other than pensions and identify the similarities and differences in accounting for those plans and pensions. 10. Explain how the obligation for postretirement benefits is measured and how the obligation changes. 11. Determine the components of postretirement benefit expense. Learning Objectives – Pensions & OPEBs
Background image of page 2
3 Postretirement Benefits Pension Benefits OPEBs Other Postretirement Employee Benefits Pension Plan: an arrangement whereby an employer provides benefits (payments) to employees after they retire for services they provided while they were working. Specifies the rights and responsibilities of the employer and employee. Players: (1) the employer who contributes to the plan; (2) the employee, who derives benefits; and (3) the pension fund, which is a separate and legal accounting entity. Pension Fund: receives contributions, invests them in an appropriate manner, and disburses pension benefits to employees. Independent of the employer and is administered by trustees. Postretirement Benefits
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Pension Plan Retired Employees Assets & Liabilities Employer Pension Fund & Plan Administrato r Some pension plans are: Contributory: employees voluntarily make payments to increase their benefits. Noncontributory: employer bears the entire cost. Qualified pension plans: offer tax benefits – deductibility of the employer’s contributions to the pension fund and tax-free status of earnings from pension fund assets. 4 Contribution s Benefit Payments Investments & Returns Nature of Pension Plans
Background image of page 4
Defined-Contribution Plan Defined-Benefit Plan Employer promises to provide plan participants with a certain contribution amount each period. -
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 37

17 Ch. 17 - Pensions - Pensions OPEBs Chapter 17 Click to...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online