When a company amends their existing pension plan to increase the defined-benefit rate, the associated expense is referred to as ________.

Name: When a company amends their existing pension plan to increase the defined-benefit rate, the associated expense is referred to as ________.
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Question

Quizplus · Accepted Answer

The expense associated with amending a pension plan to increase benefits is called "prior service cost," which reflects the cost of benefits attributed to employee service in prior periods.

When a Company Amends Their Existing Pension Plan to Increase