Quiz On Pension

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| By Ravi Kumar
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Ravi Kumar
Community Contributor
Quizzes Created: 1 | Total Attempts: 528
| Attempts: 528
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  • 1/11 Questions

    When company has not reported Actual return on plan asset it will be calculated using 

    • Expected return on plan asset ± Interest cost from net periodic table
    • Expected return on plan asset ± Service cost from net periodic table
    • Expected return on plan asset ± Actuarial gain/loss from fair value plan asset movement table
    • None of the above
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About This Quiz

This quiz on pension delves into specifics of pension plan asset returns, FCC codes for domestic plans, and classifications of SERP as pension benefits. It tests understanding of financial reporting and compliance in retirement planning.

Quiz On Pension - Quiz

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  • 2. 

    When company reports Asset allocation with Level 1, Level 2 , Level 3 and with Total colum which one should be picked up.

    • Level 1

    • Total Colum

    • Level 2

    • Level 3

    • Ignore Asset allocation

    Correct Answer
    A. Total Colum
    Explanation
    The correct answer is "Total Column" because it represents the overall asset allocation of the company. It includes all the levels (Level 1, Level 2, and Level 3) and provides a comprehensive view of how the company has allocated its assets. By choosing the Total Column, one can get a complete picture of the company's asset allocation strategy.

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  • 3. 

    Gratuity plans paying benefits upon retirement should be considered as Defined benefit Plans.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Gratuity plans that pay benefits upon retirement are considered as Defined Benefit Plans because they provide a specific and predetermined benefit to employees based on factors such as salary, years of service, and age at retirement. These plans guarantee a fixed amount of retirement income, regardless of investment performance. In contrast, Defined Contribution Plans, such as 401(k) plans, do not guarantee a specific benefit amount and instead depend on the contributions made and investment returns. Therefore, since gratuity plans pay benefits upon retirement and provide a defined benefit, they can be classified as Defined Benefit Plans.

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  • 4. 

    When company has not reported Actual return on plan asset we are going to pick the same from.

    • Projected Benefit Obligation movement table

    • Fair value Plan asset movement table

    • Asset allocation table

    • None of the above

    Correct Answer
    A. Fair value Plan asset movement table
    Explanation
    When a company has not reported the actual return on plan assets, the fair value plan asset movement table can be used to determine the return on plan assets. This table provides information on the changes in the fair value of the plan assets over a period of time, which can help in calculating the actual return on plan assets.

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  • 5. 

    Severance benefits and Jubilee and length-of-service awards should be considered as Pension.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because severance benefits and jubilee and length-of-service awards should not be considered as pensions. Severance benefits are typically one-time payments made to employees who are terminated or laid off, while jubilee and length-of-service awards are usually given to recognize an employee's long-term service. These benefits and awards are separate from pensions, which are regular payments made to retired employees as a form of income after they have stopped working.

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  • 6. 

    Which is the FCC for Domestic 401K plan expense.

    • V4KD-Domestic

    • VDCD- Domestic

    • P401

    Correct Answer
    A. V4KD-Domestic
    Explanation
    The correct answer for the FCC (Financial Cost Center) for a Domestic 401K plan expense is V4KD-Domestic. This code is likely used to track and allocate the expenses related to the 401K plan within the organization's financial system. The other options provided, VDCD-Domestic and P401, are not the correct FCC codes for this specific expense.

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  • 7. 

    SERP (Supplemental Executive Retirement plan) should be considered as Pension benefit plan and not as post retirement (Healthcare). 

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is true because SERP (Supplemental Executive Retirement Plan) is a type of retirement plan that provides additional benefits to executives beyond what is offered by a standard pension plan. It is designed to supplement their retirement income and is not specifically focused on healthcare benefits after retirement. Therefore, it should be considered as a pension benefit plan rather than a post-retirement healthcare plan.

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  • 8. 

    When company has not reported Actual return on plan asset we are going to pick the same from.

    • Projected Benefit Obligation movement table

    • Fair value Plan asset movement table

    • Asset allocation table

    • None of the above

    Correct Answer
    A. Fair value Plan asset movement table
    Explanation
    The fair value Plan asset movement table is the appropriate source to pick the actual return on plan assets when the company has not reported it. This table provides information about the changes in the fair value of the plan assets over a certain period of time. By referring to this table, we can determine the actual return on plan assets, which is crucial for evaluating the performance of the pension plan. The other options mentioned, such as the Projected Benefit Obligation movement table and the Asset allocation table, do not provide the necessary information to calculate the actual return on plan assets.

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  • 9. 

    Pension/retirement plans combined with non-pension benefits, where the company indicates that non-pension benefits form a majority of the reported benefits. In this case we update this as pension.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The given statement is false. The explanation suggests that if a company indicates that non-pension benefits form a majority of the reported benefits, then it should be updated as pension/retirement plans. However, this contradicts the statement itself, which states that pension/retirement plans are combined with non-pension benefits. Therefore, the correct answer is false.

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  • 10. 

    When company does not disclose pension costs, we need to pick interest cost, Service cost and Expected return on plan asset from 

    • Fair value plan asset movement table

    • Asset Allocation

    • Both Fair value plan asset movement table and Projected Obligation Movement table

    • Projected Obligation Movement table

    Correct Answer
    A. Both Fair value plan asset movement table and Projected Obligation Movement table
    Explanation
    When a company does not disclose pension costs, we can still determine certain components of the costs by analyzing the Fair value plan asset movement table and the Projected Obligation Movement table. These tables provide information on the changes in the fair value of plan assets and the projected obligations, respectively. From these tables, we can identify the interest cost, service cost, and expected return on plan assets. Therefore, both the Fair value plan asset movement table and the Projected Obligation Movement table are necessary to determine these costs when they are not disclosed by the company.

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Quiz Review Timeline (Updated): Mar 17, 2023 +

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  • Current Version
  • Mar 17, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 07, 2015
    Quiz Created by
    Ravi Kumar
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