Estimating & Accounting for Post-Retirement Healthcare Benefits


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What is the accumulated post-retirement healthcare benefit obligation?

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1. If service cost for 2017 is $50,000, interest cost is $10,000, and expected gain on plan assets is $20,000 how much is post retirement healthcare expense for 2017?

2. The company expects to spend $200,000 for Mary's post-retirement healthcare benefits if she becomes eligible after 25 years of service. She has worked for the company for 5 years. How much of the company's APBO is attributed to Mary?

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About This Quiz & Worksheet

You can accurately measure how much you understand about post-retirement benefits costs and obligations using this quiz/worksheet assessment tool. You must understand how to calculate these costs and explain these obligations in order to complete this assessment.

Quiz & Worksheet Goals

When you take this quiz, you will be expected to:

  • Explain the accumulated post-retirement healthcare benefit obligation
  • Solve sample post-retirement healthcare expense and APBO problems
  • Describe the expected post-retirement benefits obligation for healthcare
  • Understand how much the post-retirement liability increases in a given example

Skills Practiced

  • Problem solving - use acquired knowledge to solve APBO and post-retirement healthcare expense problems
  • Information recall - access the knowledge you've gained regarding post-retirement liability
  • Knowledge application - use your knowledge to answer questions about the accumulated and expected post-retirement healthcare benefit obligations

Additional Learning

The lesson titled Estimating & Accounting for Post-Retirement Healthcare Benefits clarifies more details about this topic. By using this lesson, you will learn:

  • What is the average needed to cover healthcare expenses for a single 65-year old retiree
  • What assumptions need to be made to estimate EPBO
  • How APBO is calculated