Accumulated Benefit Obligation (ABO)

Accumulated Benefit Obligation (ABO),

Definition of Accumulated Benefit Obligation (ABO):

  1. At the end of each accounting period, the Financial Accounting Standards Board requires companies to submit FASB Statement No. 87, which meets the balanced pension obligations of the financial condition and performance of their pension plans. There are three ways to measure this: Aggregate Performance Bond (ABO), Predicted Performance Bond (PBO) and Earned Performance Bond (VBO).

  2. Estimates of the current value of employees' pensions are based on the assumption that employees were not with the company at the time of the estimate. For a company, ABO is an estimate of pension liability. See also Plan Performance Responsibility (PBO).

  3. Accumulated Benefit Liability (ABO) is an estimate of the amount of a company's pension plan liabilities at a given time. The ABO's assessment is based on the assumption that the pension plan should be discontinued immediately and does not take into account future pay increases. This is different from a Project Benefit Obligation (PBO), which assumes that the pension scheme is ongoing and therefore anticipates future pay increases.

How to use Accumulated Benefit Obligation (ABO) in a sentence?

  1. Accumulated Benefit Liability (OAA) is the current value of future pension plans for retirees.
  2. Accumulated Benefit Obligations (OAA) Premises has proved that the pension scheme will be discontinued soon, which means that there will be no increase in future salaries.
  3. Companies should scale and report on their pension obligations and the performance of their pension plans in accordance with Statement No. 87 of the Financial Accounting Standards Board.
  4. Accumulated Benefit Liability (ABO) is an estimate of the amount of a company's pension plan liabilities at a given time.
  5. Inadequate or excessive funding status can be affected by the discount rate used and the expected return on assets invested in the project.
  6. If the liability for accumulated benefits (OAA) exceeds the assets of the pension plan, the plan does not have enough money. If the ABO pension is less than the plan's assets, the plan gets more money.

Meaning of Accumulated Benefit Obligation (ABO) & Accumulated Benefit Obligation (ABO) Definition