A company uses a deﬁned beneﬁt pension plan. At year-end, the pension obligation is $67.8 million and plan assets $56.9 million. This plan is:
A) Underfunded by $10.9 million.
B) Insolvent.
C) Committed to expend an additional $10.9 million.
D) Overfunded by $10.9 million.

Question

Quizplus · Accepted Answer

The plan is underfunded because the pension obligation ($67.8 million) exceeds the plan assets ($56.9 million) by $10.9 million.

A Company Uses a Deﬁned Beneﬁt Pension Plan