Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?

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The projected benefit obligation (PBO) requires the use of future salaries to calculate the present value of the pension obligation. The vested benefit obligation (VBO) only takes into account the portion of the pension benefit that the employee is entitled to keep if he/she leaves the company before retirement age. The accumulated benefit obligation (ABO) takes into account the vested benefits that have accumulated, but it does not require future salary projections. The restructured benefit obligation (RBO) is not a commonly used method for measuring pension obligations.

Alternative Methods Exist for the Measurement of the Pension Obligation