Question

The net pension liability (PBO minus plan assets) is decreased by: Multiple Choice Service cost. Expected return on plan assets. Amortization of net gain-AOCI. Prior service cost.

Answer 1

Service cost

Answer: Option A.

Explanation:

The net pension liability is the amount by which the liability of the pension increases the total pension assets. This increases the troubles of the people who are leading a retired life. The lower the rate of interest, more are the liabilities on the retired person's life.

On the other hand when the total pension assets are more than the total pension liabilities, then it i known as the net pension assets.