Explain Valuation of Pension Obligations.
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 15DQ
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Explain Valuation of Pension Obligations.
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Step 1
Pension obligations:
Pension obligations of an employer under a defined benefit plan are to be found out by discounting the estimated future liability of the employer.The use of actuarial science would be required to estimate the future obligations.scheme wherever pensions area unit paid sometimes by respect to the employee's wage once they retire or a mean wage over a amount. throughout employment, the leader company builds up a liability (pension obligation) for the amounts it'll after pay to the retired worker.
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