Net periodic postretirement benefit cost

Net periodic postretirement benefit cost requires a named plan, population, date, and evidence owner. Net periodic postretirement benefit cost combines service, interest, expected return when funded, supported amortization, and applicable event components under the other-postretirement model.

Apply it

Service of $500,000 plus $450,000 interest, less $100,000 expected return, plus $50,000 amortization, equals $900,000 current cost.

Common mistake

Do not assume that other postretirement benefit cost equals current claims paid. Periodic cost uses the applicable service, interest, expected-return, amortization, and event components rather than cash claims alone. Current claims paid remain on the separate cash and plan-asset rails. That error would replace the accrual-based cost model with current claims paid.

Keep the boundary clear

Claims paid reduce APBO and assets or employer cash under their facts; they are not a second expense. Service-cost presentation and capitalization rules still apply.

This cost belongs to a defined benefit other postretirement plan and connects to its APBO, benefit terms, covered population, healthcare assumptions when applicable, plan assets, and attribution period. The similarly named net periodic pension cost uses the pension model. Parallel component labels do not authorize one plan's obligation, funding, or assumptions as inputs to the other.

Authority

Read ASC 715-60-35-9 for components of net periodic postretirement benefit cost.