TAX 9873 Lecture Notes - Lecture 23: Pension, Flat Rate, Current Liability
Document Summary
Whether cash basis or accrual basis, fund up to due date for return or extension. Net periodic pension cost (nppc) (1) service cost (sc) (2) +interest cost (ic) (3) -expected return on assets (eroa) (4) +amortization of prior service cost/credit (5) +amortization of unrecognized (gain)/loss (6) +amortization of existing transition(asset)/obligation. Expense is generally determined at start of year, based on prior year-end disclosure assumptions and current year data. Insurance program for db plans (single employer and multiemployer) will not protect. Guarantees benefits to participants (around k per year max. once participant meets certain age and service criteria) Premiums have two components (flat rate ~ per participant and variable per ,000 of. Pbgc takes over plans under either standard termination or distressed termination. Interest rates and mortality for pbgc different than cash and accounting. Tends to be considered termination liability (and tends to be considered worst case scenario)
