AFM391 Chapter Notes - Chapter 19: Employee Benefits, Pension, Deferred Compensation
22 Feb 2017
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Chapter 19 - pensions and other employee future benefits. Post-retirement plans such as pensions and plans that provide health care or life insurance benefits after retirement. Post-employment plans such as long-term disability income benefits, long-term severance benefits, and continuation of benefits such as health care and life insurance. Plans covering accumulating and vested compensated absences. A pension plan is an arrangement in which an employer provides benefits to employees after they retire, for services that the employees provided while they were working. Pension accounting can be in the perspective of the employer or the pension plan. The employer is the organization that sponsors the pension plan; incurs the cost and contributes to the pension fund. In contributory plans, the employees pay part of the cost of the stated benefits. In non-contributory plans, the employer bears the entire cost. Pension benefits are taxable when they are received by the pensioner; contributions are deductible and earnings in pension fund assets are tax-free.
