Projected benefit obligation belongs in a plan-specific employer file. PBO measures benefits attributed to service through the date and includes expected future compensation when the formula depends on pay. Reconcile it from opening to ending balance using supplied actuarial movements.
Apply it
An $18 million opening PBO plus $1.2 million service cost, $900,000 interest, $600,000 prior service cost, and $400,000 loss, less $1.1 million benefits, equals $20 million.
Common mistake
Do not assume that pBO is the amount the employer must pay immediately. PBO is an actuarial present-value measure of benefits attributed to service to date, not a current cash demand. That error would turn a long-term measured promise into an unsupported current liquidity claim.
Keep the boundary clear
The reconciliation checks arithmetic, not the actuarial valuation. Salary growth, mortality, retirement, discount rates, and participant cash flows remain specialist inputs.
Authority
Read ASC 715-30-35-1A for the projected benefit obligation measure.
Put the concept to work
Apply this concept
- Explain and apply projected benefit obligation 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
- Defined benefit pension plan — Apply
To apply this concept: Required. This prior concept supplies the plan route or reconciled input required here.
Lessons
Worked examples and cases
Practice
Common mistaken ideas
Sources
Standard references
Broader topics
Related concepts
Use this idea next
- Pension actuarial assumption — Apply
Required level here: apply. Required. This prior concept supplies the terms, date, or measurement needed here.
- Pension benefit payment — Apply
Required level here: apply. Required. This prior concept supplies the plan route or reconciled input required here.
- Pension interest cost — Apply
Required level here: apply. Required. This prior schedule supplies a required amount or classification.
Show 3 more next steps
- Pension obligation gain or loss — Apply
Required level here: apply. Required. This prior schedule supplies a required amount or classification.
- Pension service cost — Apply
Required level here: apply. Required. This prior schedule supplies a required amount or classification.
- Pension settlement — Apply
Required level here: apply. Required. This prior concept supplies the terms, date, or measurement needed here.