RSM320H1 Chapter 19: CHAPTER 19
Document Summary
Three examples of benefit plans: pension and other post-retirement plans (e. g. , health care and life insurance, post-employment benefit plans (e. g. , severance benefits and long-term disability benefits, compensated absences (e. g. , parental leaves, unrestricted sabbatical leaves) A pension plan provides benefits (payments) 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. Employer sets aside money for future pension benefits in a separate legal entity. Employee and employer make contributions to the plan. Employers bear the full cost of the pension plan: no contributions made by employee. The two most common types of pension plans are: defined contribution (dc) plans, defined benefit (db) plans.
