Consider the following: I. present value of vested benefits at present pay levels
II) present value of non-vested benefits at present pay levels
III) present value of additional benefits related to projected pay increases
Which of the above constitutes the accumulated benefit obligation?

Question

Quizplus · Accepted Answer

The accumulated benefit obligation is the present value of benefits that employees have earned to date based on their current salaries, regardless of whether or not they are fully vested in the plan. Options II and III may reflect additional benefits that employees may earn in the future, but the accumulated benefit obligation is only concerned with benefits earned to date, hence only options I and II are applicable. Therefore, the correct answer is A) I & II.

Consider the Following: I