Term
| Defined Contribution Pension Plans |
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Definition
| Fixed annual contributions to a pension fund; employees choose where fundds are invested -- usually stocks or fixed-income securities. |
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Term
| Defined Benefit Pension Plans |
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Definition
| Fixed retirement benefits defined by a designated formula, based on employees' years of service and annual compensation. |
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Term
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Definition
| A professional trained in a particular branch of statistics and mathmatics to assess the various uncertainties and to estimate the comapany's obligation to employees in connection with its pension plan. |
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Term
| Vested Benefits Obligation (VBO) |
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Definition
| Benefits that employees have the right to receive even if their employment were to cease today. |
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Term
| Accumulated Benefit Obligation (ABO) |
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Definition
| The discounted present value of estimated retirement benefits earned so far by employees, applying the plan's pension formula using existing compensation levels. |
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Term
| Projected Benefit Obligation (PBO) |
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Definition
| The discounted present value of estimated retirement benefits earned so far by employees, applying the plan's pension formula using projected future compensation levels. |
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Term
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Definition
| 1 1/2% x Years of Service x Final year's salary |
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Term
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Definition
| Increase in the projected benefit obligation attributable to employee service performed during the period. |
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Term
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Definition
| Interest accrued on the projected benefit obligation calculated as the discount rate multiplied by the projected benefit obligation at the beginning of the year. |
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Term
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Definition
| The cost of credit given for an amendment to a pension plan to employee service rendered in prior years. |
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Term
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Definition
| Employer contributions and accumulated earnings on the investment of those contributions to be used to pay retirement benefits to retired employees. |
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Term
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Definition
| The person who accepts employer contributions, invests the contributions, accumulates the earnings on the investments, and pays benefits from the plan assets to retired employees or their beneficiaries. |
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Term
| Expected Return on Plan Assets |
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Definition
| Estimated long-term return on invested assets. |
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Term
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Definition
| The difference between the employer's obligation (PBO) and the resources available to satisfy that obligation (plan assets). |
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Term
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Definition
| The allocation approach that reflects the declining service pattern of the prior service cost. |
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