The Difference Between the Defined Benefit Obligation and the Pension

question 92

Multiple Choice

The difference between the defined benefit obligation and the pension assets' fair value at any point in time is known as the plan's

• A) return on plan assets.
• B) surplus or deficit.
• C) experience gain or loss.
• D) actual return.

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Definitions:

Pension Liability

The present value of the future pension payments that a company is obligated to pay to its retired employees, representing a financial liability on the company’s balance sheet.

Projected Benefit Obligation

A liability amount in a company's pension plan, estimating the total benefits to be paid to employees in the future.

Plan Assets

Investments and other assets held by a pension fund to be used for the payment of retirement benefits to participants.

Postretirement Benefit Expense

The cost recognized by companies related to the various benefits provided to employees after retirement.