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Asked by Nawaf AMehemeed on Jun 16, 2024

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The projected benefit obligation is the present value of the retirement benefits earned to date by the employees and is based on future salary levels.

Projected Benefit Obligation

A financial measurement that estimates the total amount of benefits an employer is expected to pay out to participants in a defined benefit plan.

Present Value

A financial concept that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Salary Levels

Projected or anticipated salaries for employees, taking into account factors such as inflation, promotion prospects, and market trends.

  • Understand the effect of actuarial presumptions on pension liabilities and expenditures.
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Tommy SandersJun 17, 2024
Final Answer :
True
Explanation :
The statement is true. The projected benefit obligation (PBO) is a measure used in pension accounting that represents the present value of the retirement benefits earned by employees to date under the plan, based on future salary levels. It takes into account the expected salary increases of employees between the present day and their retirement date.

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