Pension funded status belongs in a plan-specific employer file. Pension funded status equals the fair value of plan assets minus PBO for the same plan and measurement date. A negative amount is a liability; a positive amount is an asset under the applicable presentation rules.
Apply it
Plan assets of $16.15 million less a $20 million PBO produce a $3.85 million pension liability. AOCI amounts are not added again to that recognized balance.
Common mistake
Do not assume that the PBO alone is the pension liability. Funded status compares the fair value of plan assets with PBO for a pension plan. That error would overstate the liability by ignoring assets held for the payment of plan benefits.
Keep the boundary clear
Funded status is not statutory funding, termination value, unrestricted cash, benefit security, default probability, or sponsor solvency.
Authority
Read ASC 715-30-25-1 for recognition of overfunded or underfunded pension status.
Put the concept to work
Apply this concept
- Explain and apply pension funded status 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.
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Practice
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Use this idea next
- Pension funding versus expense — Apply
Required level here: apply. Required. This prior concept supplies the plan route or reconciled input required here.