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

Question

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

Quizplus · Accepted Answer

The accumulated benefit obligation (ABO) is the present value of vested and nonvested benefits at current pay levels, which corresponds to options I and II. Option III relates to projected pay increases and is not part of the ABO calculation. Therefore, the correct choice is A.

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