Change to DC from DB pension plan

CFA Level III
#1

After changing to DC from DB plan, is there any pension liabilities in the company sponsor balance sheet?

#2

There will be the accrued benefits, deferred benefits, and retirees benefits that would be part of a closed DB plan. There would no longer be wage growth or new benefits.

#3

thank you.

Will accrued benefits be converted to DC plan assets or not?

#4

I believe not. It will stay as part of a managed, closed DB plan.

The DC plan will be a new plan completely.

(Unless the question states assets are transferred etc.)

#5

There is no PBO but there are current pension liabilities in BS upon DC Plan.

#6

No, the DC contributions come under expenses.

#7

And offsetting BS account to expense account is current liability account.

#AskAccountant

#8

okay, take it as no additional liabilities in BS. thank you !