Pensions - Expected return concept

[nicksinghania]

Can anybody please correct me here -

Increase in the expected return on plan assets (under US GAAP) will - 1) reduse pension expenses - Agree

2) not affect the benefit obligation or the funded status of the plan - Disagree. As When we calculate PBO, we take into account the acturial gain/losses. So if we increase our expected return esitmates, our actuarial gains/losses would change, which will eventually change the funded status as our PBO at the end will change…

Can somebody please correct me why should i agree on point 2 above

[aymane07]

P&L from Actuarial assumptions AFFECTING PBO!!

[rawraw]

@nicksinghania

Can anybody please correct me here -

Increase in the expected return on plan assets (under US GAAP) will - 1) reduse pension expenses - Agree

2) not affect the benefit obligation or the funded status of the plan - Disagree. As When we calculate PBO, we take into account the acturial gain/losses. So if we increase our expected return esitmates, our actuarial gains/losses would change, which will eventually change the funded status as our PBO at the end will change…

Can somebody please correct me why should i agree on point 2 above

It doesn’t directly change the PBO. It’s a function of the volume of gains/losses in OCI and not the rate.