The cost of retroactive benefits granted in a plan amendment or at the initial adoption of a pension plan is called

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Prior service cost refers to the cost of providing benefits for past service that occurred before the adoption of a pension plan or before a plan amendment. Retroactive benefits granted at the initial adoption or through a plan amendment are considered prior service costs. Accumulated benefit cost refers to the present value of all benefits that have been earned by plan participants up to a specific point in time. Service cost benefits refer to the present value of the benefits that are expected to accrue in the future based on the current year's service. Vested benefits refer to benefits that are guaranteed to plan participants even if they leave their employer before retirement.

The Cost of Retroactive Benefits Granted in a Plan Amendment