When the Pension Benefit Guaranty Corporation takes over an underfunded pension plan, if there aren’t enough...
When the Pension Benefit Guaranty Corporation takes over an underfunded pension plan, if there aren’t enough assets in the pension plan to pay the retirement obligations, then taxpayers will make up the difference.
True
False
Homework Answers
False
In such a case, the remedy would be adapt to new investment models or strategies that will help the cause and ensure better impact as well. Tax payers will not be over burdened to bridge the gap of the same.
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When the Pension Benefit Guaranty Corporation takes over an
underfunded pension plan, if there aren’t enough...
The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan...
The interest cost included in the annual pension cost recorded by an employer sponsoring a defined benefit pension plan represents the a) difference between the expected and actual return on plan assets. b) increase in the defined benefit obligation due to the passage of time. c) increase in the fair value of plan assets due to the passage of time. d) interest earned on the plan assets for the year. An experience gain or loss (adjustment) is a) additional...
Stone Corporation has a defined benefit pension plan. One of its employees has vested benefits under...
Stone Corporation has a defined benefit pension plan. One of its employees has vested benefits under the plan, which will pay her $30,000 annually for life starting with the first $30,000 payment on the day she retires at the age of 65. The employee has just reached the age of 45. Stone consulted standard mortality tables to come up with a life expectancy of 80 for this employee. The implicit interest rate under the plan is 9%. Required: To fulfill...
Exercise 19-3 Sandhill Corporation provides the following information about its defined benefit pension plan for the...
Exercise 19-3 Sandhill Corporation provides the following information about its defined benefit pension plan for the year 2017: Current service cost Contribution to the plan Past service cost, effective December 31, 2017 Actual return on plan assets Benefits paid Net defined benefit liability at January 1, 2017 Plan assets at January 1, 2017 Defined benefit obligation at January 1, 2017 Interest/discount rate on the DBO and plan assets $226,000 263,500 26,000 160,000 110,000 401,000 1,600,000 2,001,000 10% Sandhill follows IFRS...
An employer's contribution to an employee's a registered pension plan (RPP) is a taxable benefit to...
An employer's contribution to an employee's a registered pension plan (RPP) is a taxable benefit to the employee. Fase 5.00 An employee does not have to be a salesperson to receive a tax-free allowance for travel costs. The 5.00 An employee may claim the goods and services tax (GST) or harmonized sales tax (HST) rebate only on expenses that are tax deductible Fuse A : 5.00 Canadian Taxation Both employers and employees need to evaluate their compensation program on an...
ABC Corporation has provided the following information regarding their defined benefit pension plan for the year 2018: C...
ABC Corporation has provided the following information regarding their defined benefit pension plan for the year 2018: Current service cost $ 235,000 Contribution to the plan 262,500 Past service cost, effective December 31, 2018 50,000 Actual return on plan assets 160,000 Benefits paid 100,000 Net defined benefit liability at January 1, 2018 400,000 Plan assets at January 1, 2018 1,600,000 Defined benefit obligation at January 1, 2018 2,000,000 Interest/discount rate on the DBO and plan assets 10% Required: 1) Prepare...
P19.3 D'Eon Corporation reports the following January 1, 2020 balances for its defined benefit pension plan, which it accounts for under IFRS: plan assets, $460,000; defined benefit obligation, $460,000. Other data relating to three years of operation of
P19.3 D'Eon Corporation reports the following January 1, 2020 balances for its defined benefit pension plan, which it accounts for under IFRS: plan assets, $460,000; defined benefit obligation, $460,000. Other data relating to three years of operation of the plan are as follows: 2020 2021 2022 Annual service cost $36,800 $ 43,700 $ 59,800 Discount rate 10% 10% 10% Actual return on plan assets 39,100 50,370 55,200 Funding of current service cost 36,800 43,700 59,800 Funding of past service cost...
The city of Whitehall provides a defined benefit pension plan for employees of the city water...
The city of Whitehall provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing...
The city of Whitehall provides a defined benefit pension plan for employees of the city water...
The city of Whitehall provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing...
Carla Vista Corporation sponsors a defined benefit pension plan and reports under IFRS. On January 1,...
Carla Vista Corporation sponsors a defined benefit pension plan and reports under IFRS. On January 1, 2020, the company reported plan assets of $1,900 and a defined benefit obligation of $2,000 (all amounts in thousands of dollars). During 2020, the current service cost was determined to be $171, the discount rate on the DBO and plan assets was 6%, while the actual return on the plan assets for the year was $105. Carla Vista made contributions of $175 into the...
Rausch Corporation has a noncontributory, funded, defined benefit pension plan that specifies annual year end retirement...
Rausch Corporation has a noncontributory, funded, defined benefit pension plan that specifies annual year end retirement payments. Rausch's pension plan specifies annual year end retirement payments equal to: 2% X Service Years X Final Year's Salary. Rausch complies with generally accepted accounting principles (GAAP). The only employee of the company was hired on 1-1-2012 and has earned pension benefits since he was hired. He is expected to retire on 12-31. 2026. His retirement is expected to span 8 years. Thus,...
Stone Corporation has a defined benefit pension plan. One of its employees has vested benefits under the plan, which will pay her $30,000 annually for life starting with the first $30,000 payment on the day she retires at the age of 65. The employee has just reached the age of 45. Stone consulted standard mortality tables to come up with a life expectancy of 80 for this employee. The implicit interest rate under the plan is 9%. Required: To fulfill...
Exercise 19-3 Sandhill Corporation provides the following information about its defined benefit pension plan for the year 2017: Current service cost Contribution to the plan Past service cost, effective December 31, 2017 Actual return on plan assets Benefits paid Net defined benefit liability at January 1, 2017 Plan assets at January 1, 2017 Defined benefit obligation at January 1, 2017 Interest/discount rate on the DBO and plan assets $226,000 263,500 26,000 160,000 110,000 401,000 1,600,000 2,001,000 10% Sandhill follows IFRS...
An employer's contribution to an employee's a registered pension plan (RPP) is a taxable benefit to the employee. Fase 5.00 An employee does not have to be a salesperson to receive a tax-free allowance for travel costs. The 5.00 An employee may claim the goods and services tax (GST) or harmonized sales tax (HST) rebate only on expenses that are tax deductible Fuse A : 5.00 Canadian Taxation Both employers and employees need to evaluate their compensation program on an...
Rausch Corporation has a noncontributory, funded, defined benefit pension plan that specifies annual year end retirement payments. Rausch's pension plan specifies annual year end retirement payments equal to: 2% X Service Years X Final Year's Salary. Rausch complies with generally accepted accounting principles (GAAP). The only employee of the company was hired on 1-1-2012 and has earned pension benefits since he was hired. He is expected to retire on 12-31. 2026. His retirement is expected to span 8 years. Thus,...
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