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Unformatted text preview: M351 Notes, Class 10: Pensions and OPEB, pages 1019-1037 Today’s topics • What is a pension? What are the different types of pensions? Who is bearing the risk in each case? Different funding; Defined contr = employee, defined ben. = employer • What are the components of pension expense? • Using a pension worksheet • Amortization of prior service cost • Corridor Amortization A. Pensions benefits are earned while an employee works and paid after the employee retires. B. The employer of the workers who will receive pension benefits creates the pension plan and is responsible for funding the separate entity (the pension plan) who will pay the worker pensions. C. The pension plan is responsible for investing employer contributions until the contribution plus investment earnings are paid to the retired worker. D. There are two kinds of pension plans: (1) a defined contribution plan and (2) a defined benefit plan....
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This note was uploaded on 12/04/2009 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue.
- Spring '08