Imagine you are an accounting manager and are in the process of implementing a p
ID: 3918816 • Letter: I
Question
Imagine you are an accounting manager and are in the process of implementing a pension plan for your organization. Prepare a brief report to management on the various types of pension plans. In your report, compare and contrast a contributory pension plan and a noncontributory pension plan, and discuss the theoretical justification for the accrual recognition of pension cost. Include one (1) recommendation to management on which type of pension plan would be most beneficial to the company.
Discuss the type of information that must be included in notes to financial statements, and explain why the information is relevant to financial statement users. Imagine you are an employee of a company and want to know if the pension plan will provide you with the necessary benefits upon retirement. Determine the type of information you would look for in the notes on the pension funds, and ascertain the way in which the information will provide assurance that the company will properly fund your pension.
Explanation / Answer
An rente figure is the retirement substance , which an individual gets from their insurance agencies all the time or as a ace measure .
There are different sorting of such pension plan offered by different organizations.
A benefits innovation is a retirement arrange for that requires a commercial enterprise to shuffle commitment in to a consortium of assets that are put aside for specialists future vantage by and large at the season of retirement. Any wage produced on stores put aside is likewise accessible to doers.
Beneath I spring a shortstop note on sort of pension plan.
Contibutory pension plan
individuals support with their own particular cash and use to put something aside for retirement.
It is the inverse of a defined benefit plan .
It is regularly an annuity design financed by the business or an element other than the individual who will specifically profit by the placement .
Defined benefit plan
Here the business ensures the worker to give a positive cadence of advantage upon retirement. The business is entitled for a particular transcription of annuity installments to the resigning worker., and if the advantage in the annuity design are insufficient to pay the advantages , the organization is obligated for the eternal sleep of the advantage.
Comparison of Contributory and non contributory pension plans
With contributory pension plan, managers can add to coordinate with commitment made by workers. This will lead to an large increment in the last payout to representatives. Commitment to these plans will empower to diminish the assessable wage to representatives. As these advantages are not guarnteed, last payout may increment or reduction in view of instability of venture showcase.
Support for the accumulation acknowledgment of pension cost :
Proposal of annuity paln :
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