Is this a true or false question? Is it multiple choice? is it expected to be written in complete sentences as a short answer? I need more context on how to respond to the situation in the question :)
Answer: Net Pension liability of $29 million
Explanation:
A net pension liability will be reported when the obligations of the employer which is the Projected benefit obligation, exceeds the Plan assets because the company has less resources than required to satisfy its obligations.
A net pension asset will be when the Projected Benefit Obligation (PBO) is less than the Plan assets.
In this case, there will be a Net pension liability of;
= PBO - Plan assets
= 75 - 46
= $29 million
All of the above are important for the flexible budget
