Pensions

Question 1

Pension fund

Answer 1

funds set aside to meet the employer’s future pension obligation (not on companies books)

Question 2

Vesting

Answer 2

occurs when an employee has met certain requirements and becomes eligible to receive pension benefits at retirement regardless of whether or not employee continues to work

Question 3

Discount Rate

Answer 3

rate used to compute all acturial PV calculations. Rate at which pension obligation could be settled and is pegged at the market rate of int.

Question 4

Expected rate of return

Answer 4

rate used to compute expected return on plan assets, one of the components of pension expense.