Employer pension contribution belongs in a plan-specific employer file. An employer contribution transfers sponsor cash or other assets to the benefit trust. It increases plan assets and improves funded status but is not defined as pension cost or a benefit payment.
Apply it
A $1.2 million cash contribution raises trust assets by $1.2 million and reduces employer cash by the same amount. If periodic cost is $1.4 million, neither amount replaces the other.
Common mistake
Do not assume that a pension contribution is pension expense. A contribution is sponsor cash into the trust; periodic cost is built from its accounting components. That error would force cash, cost, and funded status to agree even when their reconciliations properly differ.
Keep the boundary clear
The accounting record does not decide the legally required contribution, tax deduction, fiduciary compliance, plan liquidity, or sponsor solvency.
Authority
Read ASC 715-30-35-64 for contributions between a measurement date and year-end.
Put the concept to work
Apply this concept
- Explain and apply employer pension contribution within a reconciled employer benefit-plan workpaper using supplied authoritative and actuarial facts.
Learning resources
Choose a lesson, try an application, or inspect the sources behind this concept.
Build on these ideas
- Pension plan assets — Apply
To apply this concept: Required. This prior concept supplies the plan route or reconciled input required here.