The pension fund is a separate legal and accounting entity. Although a company is not required to have a pension plan, if it does it must follow financial accounting standards and government accounting and presentation dictates. The major types of pension plans are defined contribution and defined benefit. The course presents reporting by a trustee for the plan, including the requirements surrounding pension plan financial statements. The accounting for settlements, curtailments, and terminations is presented. Postretirement benefit plans other than pensions are also discussed. Finally, the accounting and reporting for postemployment benefits are presented.
Upon successful completion of this course, participants will be able to:
- Distinguish between defined contribution and defined benefit pension plans.
- Recognize terminology used in pension plan accounting.
- Calculate pension expense costs in a defined benefit plan.
- Identify the reporting requirements for pension plans in financial statements.
- Identify the differences between pensions and postretirement health care benefits.
- Recognize differences in accounting for pensions vs. accounting for other postretirement benefits.
Table of Contents
Defined-Benefit Pension Plans
Total Pension Expense
Actuarial Gains and Losses/Prior Service Costs
Gain or Loss
Smoothing Unexpected Gains and Losses on Plan Assets
Smoothing Unexpected Gains and Losses on the Pension Liability
Pension Plan Benefit Formula
Underfunding or Overfunding
Summary of Accounting for Pension Plans
Employers Having More Than One Defined-Benefit Plan
Annuity (Allocated) Contracts
Employee Retirement Income Security Act (ERISA)
Settlement, Curtailment, and Termination
Trustee Reporting of a Defined-Benefit Pension Plan
Postretirement Benefit Plans Other Than Pensions
Employers' Disclosures about Pension and Other Postretirement Benefits
Pension Plan Financial Statements
Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Actuarial Present Value of Plan Benefits
Changes in Actuarial Present Value of Plan Benefits
Employers' Accounting for Postemployment Benefits
Profit Sharing Plans
Annual Report References
Review Question Answers and Rationales
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