Bao Company has a defined benefit plan for its emp
Bao Company has a defined benefit plan for its employees.Which of the following changes in assumptions would most likely decrease its reported pension expense? An increase in the expected:
A.retirement age.
B.return on plan assets.
C.growth rate of salaries.
参考解答
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2024-10-27 08:53:44
Ans:B.
Reported pension expense for a defined benefit plan equals the plan’s costs (the sum of service cost, prior services cost, interest cost, and actuarial gains or losses) minus the expected earnings on the plan’s investments.The expected earnings are based on the expected return on plan assets.An increase in the expected return would increase the plan’s expected earnings and decrease pension expense.Increases in the assumed retirement age or rate of salary growth would result in actuarial losses and increase pension expense.
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