Question

A pension asset is reported when: a. the accumulated benefit obligation exceeds the fair value of pension plan assets.

b. the accumulated benefit obligation exceeds the fair value of pension plan assets, but a prior service cost exists.
c. pension plan assets at fair value exceed the accumulated benefit obligation.
d. pension plan assets at fair value exceed the projected benefit obligation.

Answer 1

C) pension plan assets at fair value exceed the projected benefit obligation.

Step-by-step explanation:

Pension plan assets include the cash and all the investments in securities (stocks, bonds, etc.) that your plan will use to pay for future benefits once you retire. If the investments gained a lot of value (specially the stocks), their fair market value might be higher than the projected future obligations. This means that your plan has more than enough money to cover your benefits once you retire.