ACCT 2520 Chapter Notes - Chapter 19: Pension, Legal Personality, Discount Window
9 Apr 2017
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Three examples of benefit plans: pension and other post-retirement plans (health care, life insurance, etc. , post-employment benefit plans (severance benefits, long-term disability, etc. , compensated absences (parental leaves, unrestricted sabbatical leaves, etc. ) A pension plan provides benefits to retirees for services provided during employment. The employer sponsors and contributes to the fund and incurs the cost of the pension plan: requires accounting for the employer. The pension plan receives the contributions, administers pension assets and makes pension payments to the beneficiaries: requires accounting for the pension plan. Funded employer sets aside money for future pension benefits in a separate legal entity. Contributory employee and employer make contributions to the plan. Non-contributory employer bears the full cost of the pension plan; no contributions made by employee. Employer contributes a defined sum to a third party: ownership of plan assets assumed by plan trustee, trustee is responsible for investment and distribution of plan assets.
