Defined Pension Plan: Cashflow Impact

CFA Level II FRA
#1

Hi All,

Have a question on the cashflow impact of a Defined Benefits plan. What actually shows up on the employer’s CFO? There’s a line item that says “Accrued Pension & Severance Costs, less payments” on the CFO that I’m looking at, which doesn’t correspond at all to Employer’s Contribution in PBO. Is there another component of cash flow that I’m missing (such as Amendments, Curtailments & Settlements, FX Effects?) Thanks!

#2

I believe it’s called “employer contribution” which is part of the PBO…not sure if that answers your question…

#3

Thanks. I was actually trying to figure out what is the cash flow impact of the pension plans - Is it really just Employer Contribution during the year? Also, what then is the “Accrued Pension & Severance Costs, less payments” CFO adjustment item supposed to be?