Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. If the benefits relate to an estimated 25 years of service and five of those years have been completed,

Question

Quizplus · Accepted Answer

The actuary estimated the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. Since the benefits relate to an estimated 25 years of service and five of those years have been completed, the accumulated postretirement benefit obligation (APBO) would be $12,000. Therefore, the correct answer is D, which states that the APBO would be $12,000.

Assume the Actuary Estimates the Net Cost of Providing Health