My dumbed down Accounting for Pension Expense.

It doesnt go down. It goes read-only

OMG, clear as a bell, thank you. You’re right, some of the naming conventions are confusing, the one that gets me is Total Return, and why it’s even defined at all. GL!

Why are you talking about cost and expense? The CFA books only talk about cost whether it is TOTAL or not.

Amazing!

Interesting, not to FRA yet, but bookmarked!

This is bl**dy good bloodline… I hope not many people know the whole curriculum as good as you do because it’ll be hard for me to pass…

BTW are you planning to be the next S2000magician??? haha well done!

I love u

Incredibly helpful! Thanks for putting this together.

This was huge for me. Thanks.

bookmarked

I have a printed copy of this post for reference, a super useful summary.

This is the most epic and colorful explanation of pension cost. Even 5 years later I love it.

Thanks

The year is 2019 and this is still saving lives. Thank you bloodline!

This is beyond awesome! Thank you!

good one

Ok I have to say this is not correct. I checked this equation with all the notes providers and CFAI text books as well.

I know its difficult to understand this but broke it down to small equations and concluded the following : ( I have basically changed the sign in your equation, rest is all correct).

Under the first approach

[Change in Assets - Contribution] - Change in Liability

= Change in Assets - Change in Liability - Contribution

= Change in Funded Status - Contribution

Under the Second Approach

Change in Liability - [Change in Assets - Contribution]

= Change in Liability - Change in Assets + Contribution

= Change in Funded Status + Contribution.

You have to take out the contribution from the change in assets, if you remember the text says, change in assets excluding the contributions.

Would be great if you can focus/ tell a bit more about the actuarial reserves in the big bin.

  • What’s the source of the calculation?

  • When is it calculated ?

  • Where is it stored?

  • When is it used in different equations.

You are a saint. It is 2024 and this post still saving lives