About This Chapter
Pensions & Post-Retirement Benefits - Chapter Summary
The engaging lessons comprising this chapter provide overviews of accounting processes and calculations that cover retirement compensation, incentive programs, post-retirement health benefits and pension plans. You will gain a better understanding of the importance of these calculations and estimations in the field of accounting. Easily accessible lessons, self-paced study and expert instruction make learning convenient and engaging. Brief self-assessment quizzes are great tools you can use to measure your understanding of these concepts and possible need for further review. After you complete this chapter, you should be able to:
- Provide details about traditional pensions and 401(k) plans
- Explain the importance of ERISA law
- Discuss incentive plans such as profit sharing and employee stocks
- Prepare accounting information regarding stock options and equity compensation
- Calculate earnings per share for post-retirement benefits and a pension plan's funded status
- Employ accounting methods used for defined contribution pension plans
- Estimate and account for post-retirement health benefits
- Understand and account for post-retirement benefits and benefit expenses
1. Retirement Compensation Systems: 401(k) and Pensions
One of the most valuable benefits an employer may offer to employees are employer-sponsored retirement plans. In this lesson, you'll learn about two common retirement benefits: 401(k) plans and traditional pensions. A short quiz follows.
2. Organizational Incentive Programs: Profit Sharing, Gain Sharing, and Employee Stock Ownership
One way to tie a company's success to employee success is to utilize incentive programs where employees profit when the company does. In this lesson, you'll learn about profit sharing, gain sharing and employee stock ownership.
3. Accounting for Stock Options & Equity Compensation Plans
In this lesson, we'll explore the world of stock options. A simple example will be used to illustrate the accounting and journal entries for them. We'll also cover SARs, another form of employee participation in the appreciation of share prices.
4. Calculating Earnings Per Share for Post-Retirement Benefits
In this lesson we will look at how retirees can determine and use the earnings per share of a company to evaluate the profitability of shares of stock in their retirement investment portfolios.
5. How to Calculate the Funded Status of a Pension Plan
The funded status of a pension plan is the fair value of the plan's assets minus the present value of its projected benefit obligation. We will use an example to calculate both and determine if the pension fund is over or under funded.
6. How to Account for Defined Contribution Pension Plans
In this lesson, you'll explore the nature of retirement and pension plans, the differences between a defined contribution plan and a defined benefit plan, and the accounting methods used with defined contribution plans.
7. Estimating & Accounting for Post-Retirement Healthcare Benefits
This lesson will explore the issues in calculating the cost of post-retirement healthcare plans for employees. We will also use an example to take you through the mechanics of accounting for these plans.
8. How to Account for Post-Retirement Benefits
This lesson will use an example to walk you through the mechanics of accounting for post-retirement benefits. You'll also learn to calculate the accumulated post-retirement benefit obligation.
9. Accounting for Post-Retirement Benefit Expenses
In this lesson, you will learn the two types of post-employment benefit plans that employers might set up for their workers. You'll also see the accounting treatment of the two types of retirement plans and the different components of the post-retirement benefit expense to be recognized.
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Other chapters within the Accounting 202: Intermediate Accounting II course
- Accounting for Fixed & Intangible Assets
- Accounting for Securities & Investments
- Accounting for Liabilities & Contingencies
- Accounting for Bonds & Notes Payable
- Accounting for Operating & Capital Leases
- Accounting for Shareholder Equity & Comprehensive Income
- Cash Flows & Disclosures
- Accounting for Corporate Income Taxes
- Identifying & Correcting Errors in Accounting
- Studying for Accounting 202