Pension actuarial assumption requires a named plan, population, date, and evidence owner. An actuarial assumption represents a supported estimate about financial or demographic conditions used in a benefit measurement. Record its purpose, plan, population, date, specialist owner, prior value, change, and supplied effect.
Apply it
Discount rates affect present value; salary growth can affect final-pay benefits; mortality, retirement, turnover, and elections affect timing and amount. One favorable rate cannot stand in for the complete model.
Common mistake
Do not assume that an accountant may fill a missing actuarial assumption from a prior-year file. Assumptions require current, dated support from the responsible specialist and must match the measured plan and population. That error would use stale or mismatched inputs to support a current obligation measurement.
Keep the boundary clear
Accounting challenges consistency and evidence but does not select actuarial assumptions or treat a model input as a management preference.
Authority
Read ASC 715-30-35-42 for the assumptions used to measure pension obligations.
Put the concept to work
Apply this concept
- Explain and apply pension actuarial assumption within a reconciled employer benefit-plan workpaper using supplied authoritative and actuarial facts.
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Build on these ideas
- Projected benefit obligation — Apply
To apply this concept: Required. This prior concept supplies the terms, date, or measurement needed here.
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Use this idea next
- Pension discount rate — Apply
Required level here: apply. Required. This prior concept supplies the terms, date, or measurement needed here.