QUESTION 24 The difference between the accumulated benefit o

QUESTION 24 The difference between the accumulated benefit obligation (ABO) and the projected benefit obligation (PBO) is: O the PBO considers non-vested obligations and the ABO does not O the PBO takes into account the time value of money and the ABO does not the PBO takes into account future pay increases and the ABO does not O the PBO takes into account mortality rates of employees and the ABO does not

Solution

The difference between the accumulated benefit obligation (ABO) and projected benefit obligation (PBO) is :

ANSWER = C) the PBO takes into account future pay increases and the ABO does not

The only difference between the accumulated benefit obligation (ABO) and its projected benefit obligation (PBO) is the value used for the employee\'s compensation. In ABO employee service rendered based on employee service & current & past compensation levels while In PBO  employee service rendered based on assumptions as to future compensation levels.