Pensions

Question 1

What is the Projected Benefit Obligation (PBO)?

Answer 1

Reflects FUTURE compensation levels

Question 2

What is the Accumulated Benefit Obligation?

Answer 2

Present Value of pension benefits accrued based on PRESENT compensation levels

Question 3

How is Pension Expense calculated?

Answer 3

"PRIUS"
\+ Prior Service Cost Amortization
- Return on Plan Assets (Estimated)
\+ Interest (B. PBO x Interest Rate & Increase in PBO due to time)
\+ Unexpected Loss (- Gain)
\+ Service Cost
\: Pension Expense

Question 4

How is an Overfunded PBO classified on the Balance Sheet?

Answer 4

As a Non-Current Asset

Question 5

How is an Underfunded PBO classified on the Balance Sheet?

Answer 5

As a Non-Current Liability

Question 6

How and where are the Gains and losses from the change in the FV of Plan Assets recorded?

Answer 6

Recorded net of tax in OCI

Question 7

What are the required F/S disclosures for Pensions?

Answer 7

Pension funding policies
Types of assets held
5 year benefits to be paid
5 year benefits in aggregate thereafter
Estimated Pension Contribution for next period

Question 8

What are vested benefits?

Answer 8

Benefits owed to the employee regardless of continuance of employment.
Via the Full Eligibility Date