Minimum pension liability

A minimum pension liability arises when the accumulated benefit obligation for a pension plan is greater than the fair value of the plan's assets. This amount is an unfunded liability that the organization sponsoring the plan will eventually need to fund, so that the expected payouts to pensioners can be made. The amount of this liability is accrued as an expense to the extent that it has not already been accrued.

Related Courses

Accounting for Retirement Benefits