Differing measures of the pension obligation can be based on

Question

Quizplus · Accepted Answer

Different measures of the pension obligation can be appropriate for different purposes. Including all years of service, vested and non-vested, using current salary levels (A) provides a comprehensive measure of the total liability. Only including vested benefits using current salary levels (B) gives an accurate picture of the current obligation to employees. Including both vested and non-vested service using future salaries (C) provides a measure of the long-term liability. Therefore, the best choice is to use all three measures to fully understand the extent of the pension obligation.

Differing Measures of the Pension Obligation Can Be Based on