Exam 19: Post-Employment Benefits

Changes in defined benefit pension plans that eliminate or reduce, for a significant number of employees, the accrual of defined benefits for some or all of their future services are:

XYZ sponsors a defined contribution plan for its employees.On January 1, Year 1, the company paid $120,000 to the plan's trustee.The trustee called for annual payments of $90,000 to be made annually into the plan.Which of the following best describes the effects of this plan on XYZ's Year 1 financial statements?

The formula used to calculate pension expense must necessarily be the same as the formula used to calculate funding to the plan.

The balance of pension plan assets at fair value, as of any measurement date, reflects the cumulative: (Choose from the four Choices provided below)

Funding a pension plan may be handled as follows:

Costs related to a new pension plan that are necessary to "catch up" for services rendered prior to the inception of the pension plan are classified as:

Today is John's 57th birthday and he has served 14 years for his firm.John is expected to retire on his 65th birthday.His firm expects to incur $5,000 of annual net health care claims costs for John beginning one year after his retirement date and continuing each year for a total of seven years (assume seven end of year payments in all).To be fully eligible for these benefits, John must work 20 years.Compute expected post-retirement benefit obligation for John today if the discount rate is 8%.

Under the simplified approach to accounting for defined benefit pension plans under ASPE there may be a pension asset ceiling.

Jamieson's balance sheet as per IFRS for Year 2 would show a net:

Jamieson's pension expense as per ASPE for Year 2 would be:

What is a defined contribution plan?

All three funding approaches result in full funding of a pension plan over time.

Benefits pursuant to a pension plan that are not contingent upon an employee's continuing service are referred to as:

Jamieson Corp. sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: - The plan was started on January 1st, Year 1, with $20,000 of funding - The company has a December 31st, year-end. - The plan is non-contributory. - The company's long-term debt is subject to a 6% discount rate. -Jamieson's pension expense as per IFRS for Year 2 would be:

In order to be registered, a pension plan must be trusteed.

Under IFRS, net interest (finance)revenue or expense on defined benefit obligations must always be included within pension expense.

All of the following are relevant policy disclosures suggested by the AcSB except:

Employees are not allowed to make contributions to a defined contribution pension plan.

Pension plans that are registered meet Revenue Canada requirements and hence qualify for tax advantages.

A non-funded pension plan is one where the employee must bear a part of the cost of the plan.