COMMERCE 3AC3 Chapter Notes - Chapter 19: Pension, Toyota Electronic Modulated Suspension, Longrun
26 May 2016
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Document Summary
Pension plan is an arrangement in which an employer provides benefits (payments) to employees after they retire, for services that the employees provided while they were working. Funded: employer sets money aside for future pension benefits by making payments to a funding agency. Agency makes payments to recipients as the payments become due. Contributory plans: employees pay portion of the cost or makes voluntary payments. Non-contributory plans: employers bare the entire cost. Contributions are defined (how much employers must pay) Benefits are not defined (how much employees receive) Liability is reported on the employer"s statement of financial position only if the required contributions have not been made in full, and an asset is reported if more than the required amount has been contributed. Benefit cost or pension expense is amount employer is obligated to contribute to the plan. Prior or past service cost: make up for employee"s contributions before the plan was established (amortized systematically)
