Pension plan amendment requires a named plan, population, date, and evidence owner. A plan amendment is an authorized change to benefit terms. Record approval, communication, effective date, affected participants, past-versus-future service effect, and the actuarial remeasurement.
Apply it
A July amendment adds $600,000 of benefits for past service. The supported amount increases PBO and enters prior service cost in OCI before later amortization.
Common mistake
Do not assume that a board discussion creates pension prior service cost. Recognition depends on executed plan terms, the effective date, affected participants, and an actuarial remeasurement. A draft term sheet does not meet that evidence test. That error would recognize an effect before enforceable terms and the affected population are established.
Keep the boundary clear
A board discussion is not an executed amendment. Accounting applies supplied legal and actuarial conclusions and keeps unresolved dates or populations open.
Authority
Read ASC 715-30-35-10 for pension amendments granting benefits for prior service.
Put the concept to work
Apply this concept
- Explain and apply pension plan amendment within a reconciled employer benefit-plan workpaper using supplied authoritative and actuarial facts.
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- Defined benefit pension plan — 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 curtailment — Apply
Required level here: apply. Required. This prior concept supplies the terms, date, or measurement needed here.
- Pension plan freeze — Apply
Required level here: apply. Required. This prior concept supplies the terms, date, or measurement needed here.
- Pension prior service cost or credit — Apply
Required level here: apply. Required. This prior schedule supplies a required amount or classification.