BU397 Lecture Notes - Lecture 8: Defined Contribution Plan, Deferred Compensation, Pension
Document Summary
Chapter 19 pensions and other post-employment benefits. Defined benefit obligations: dbo, beginning, + current service cost, + interest cost, +/- past service costs of plan amendments during period, +/- actuarial gains (-) or losses (+, = dbo, end of period. ,000: 2%*40*,000 = ,000/year, this person will get ,000 every year after retired, to find out how much money you need to pay out ,000 every year, you would do pva(80,000), i = ?, n = 20. Pension expense: + current service cost, + interest cost, + past service cost. Expected return: +/- actuarial gains and losses changes in actuarial assumptions and experience adjustments, +/- gains and losses from re-measurements relating to return on plan assets, = total pension expense, dr. pension expense and cr. Net defined benefit a/l (pension expense amount: dr. net defined benefit a/l and cr. Cash (contribution amount: net interest interest cost expected returns.
