An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund held and managed by a third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on the amount of contributions and the investment income earned on those contributions. The third party trustee assumes the obligation of disbursing the funds to retiring employees.
An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund held and managed by a third party. The fund is legally separate from the entity and is to be used solely for the retirement pay of employees. The amount to be received by a retiring employee is dependent on the amount of contributions and the investment income earned on those contributions. The third party trustee assumes the obligation of disbursing the funds to retiring employees.
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 52P
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An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund
held and managed by a third party. The fund is legally separate from the entity and is to be
used solely for the retirement pay of employees. The amount to be received by a retiring
employee is dependent on the amount of contributions and the investment income earned on
those contributions. The third party trustee assumes the obligation of disbursing the funds to
retiring employees.
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