Ch 20A HWq - predict. Level of cost varies geographically...

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Chapter 20 A Homework Questions Q30. What are postretirement benefits other than pensions? Postretirement benefits other than pensions include healthcare and other welfare benefits provided to retirees, their spouses, dependents, and beneficiaries. The other welfare benefits include life insurance offered outside a pension plan, dental care as well as medical care, eye care, legal and tax services, tuition assistance, day care, and housing activities. Q32. What are the major differences between postretirement healthcare benefits and pension benefits? Differences between Postretirement Healthcare Benefits and Pensions Item Pensions Healthcare Benefits Funding Generally funded. Generally NOT funded. Benefit Well-defined and level dollar amount. Generally uncapped and great variability. Beneficiary Retiree (maybe some benefit to surviving spouse). Retiree, spouse, and other dependents. Benefit Payable Monthly. As needed and used. Predictabilit y Variables are reasonably predictable. Utilization difficult to
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Unformatted text preview: predict. Level of cost varies geographically and fluctuates over time. Additionally, although healthcare benefits are generally covered by the fiduciary and reporting standards for employee benefit funds under ERISA, the stringent minimum vesting, participation, and funding standards that apply to pensions do not apply to healthcare benefits. Q33. What is the difference between the APBO and the EPBO? What are the components of postretirement expense EPBO (expected postretirement benefit obligation) is the actuarys present value of all benefits expected to be paid after retirement, while APBO (accumulated postretirement benefit obligation) is the actuarial present value of future benefits attributed to employees services rendered to a particular date. The components of postretirement expense are service cost, interest cost, expected return on plan assets, amortization of prior service cost, and gains and losses....
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Ch 20A HWq - predict. Level of cost varies geographically...

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