Required Reporting for Defined Contribution, Defined Benefit, and other Postretirement Plans

Reporting
Student:
Professor:
Course title:
Date:
MEMORANDUM
DATE: July 16, 2014
TO: Helen Kolinsky, CEO and President, Finlay Glass Manufacturers
FROM: Terry Mitchell, Controller, Finlay Glass Manufacturers
SUBJECT: Required Reporting for Defined Contribution, Defined Benefit, and other Postretirement Plans
The key objective of a plan’s fiscal statements is to offer information which is valuable in measuring the pension plan’s current and future capability to pay benefits whenever they are due. It is notable that this objective necessitates the presentation of information regarding the economic resources of the plan as well as a measure of the accrued benefits of the participant. The objective of this memorandum is to provide a comprehensive explanation of the required reporting for defined contribution, defined benefit, as well as postretirement plans. In addition, an explanation of what must happen for the 2 segments to be eliminated is provided.
Defined Benefit Plan
In a defined benefit plan, the funding process is understood as making the sporadic contributions to a funding agency in order to make sure that there are available funds to meet the claims of the retiree. Defined-benefit pension plan fiscal statements meant to be presented according to the GAAP have to be prepared on the accrual basis and must comprise the following: (i) a statement of the net assets which are available for benefits as of the ending of the plan year; (ii) a statement of alters in net assets which are available for benefits for the year then concluded; (iii) information as regards the actuarial present value of accrued plan benefits; and (iv) information as regards the effects of specific factors that affect the year-to-year alter in accrued plan benefits (American Institute of CPAs, 2014). A defined benefit plan, in essence, promises a certain monthly benefit at retirement. The plan might specify this promised benefit as parti...