The difference between the accumulated benefit obligation (ABO) and the projected benefit obligation (PBO) is:
A)the PBO considers non-vested obligations and the ABO does not.
B)the PBO takes into account the time value of money and the ABO does not.
C)the PBO takes into account future pay increases and the ABO does not.
D)the PBO takes into account mortality rates of employees and the ABO does not.

Question

Quizplus · Accepted Answer

The key difference between the Projected Benefit Obligation (PBO) and the Accumulated Benefit Obligation (ABO) is that PBO includes assumptions about future compensation levels (e.g., pay increases), whereas ABO is based on current salary levels and does not account for future salary increases.

The Difference Between the Accumulated Benefit Obligation (ABO) and the Projected