When considering defined benefit pension plans, which of the following will not increase the projected benefit obligation (PBO)?
A)A decrease in the discount rate
B)An increase in estimated compensation growth
C)An increase in expected average length of lives of employees
D)A decrease in the expected rate of return on plan assets

Question

Quizplus · Accepted Answer

A decrease in the discount rate, an increase in estimated compensation growth, and an increase in expected average length of lives of employees will all increase the projected benefit obligation (PBO) in a defined benefit pension plan. However, a decrease in the expected rate of return on plan assets will not increase the PBO, as it affects the expected return on plan assets, not the PBO.

When Considering Defined Benefit Pension Plans, Which of the Following