Pension benefit payment belongs in a plan-specific employer file. A benefit payment settles an amount already included in the obligation. When the trust pays, the same supported amount reduces both PBO and plan assets, usually without new sponsor expense.
Apply it
A $1.1 million trustee payment reduces the $20 million obligation rollforward and the $16.15 million asset rollforward by $1.1 million. Its net funded-status effect is zero in that simple case.
Common mistake
Do not assume that a benefit paid by the trust is a second employer expense. A trust-paid benefit reduces the obligation and plan assets and does not create another employer cost. That error would record expense twice and omit the matching reduction in obligation and trust assets.
Keep the boundary clear
Direct employer payments, insurer settlements, fees, and timing differences can break the symmetry. They need named evidence rather than a plug.
Authority
Read ASC 715-20-50-1 for the obligation and plan-asset rollforwards, including benefits paid.
Put the concept to work
Apply this concept
- Explain and apply pension benefit payment 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
- Projected benefit obligation — Apply
To apply this concept: Required. This prior concept supplies the plan route or reconciled input required here.