BU397 Lecture Notes - Lecture 6: Retained Earnings, Expected Return, Current Yield
Document Summary
Abo beginning of period + current service cost + interest cost . Benefits paid to retirees +/- past service costs of plan amendments during period +/- actuarial gains (-) or losses (+) during period (not on assets though, that"s in plan assets: = abo end of period. Current period service costs: the cost of the benefits that are to be provided in the future in exchange for the services that the employees provided in the current period. It is the amount of pension benefit earned in the current period: the method for allocating the estimated cost to the individual years during which the entitlement to the benefits builds. Accrues a relatively equal charge for each period. Actuaries base the accounting calculations on future salary levels and then attributes the cost of the future benefits to the accounting period. Usually between the date of hire and the date when the employee becomes eligible for full benefits: known as the attribution period.
