CFA® Level II FSA - Pension Obligation (PBO) Explained

Рет қаралды 4,844

Жыл бұрын

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Are you preparing for the CFA Level II exam and feel a bit overwhelmed by the complexities of pension accounting? Don't worry, we've got you covered! In this video, we will demystify the calculation of pension obligations for defined benefit pension plans, a topic of utmost importance for your upcoming exam.
💡 We'll start with the basics, defining key terms and concepts that are fundamental to your understanding. Next, we'll dive into the calculation of the present value of future pension obligations, breaking down the process step by step. We will tackle the various components such as service cost, interest cost, plan amendments, and actuarial gains or losses. In addition, we'll discuss the impact of changes in actuarial assumptions and plan amendments on the pension obligation.
👨‍🏫 Our mission is to make the CFA Level II curriculum easy to understand, relatable, and less intimidating. We'll provide plenty of examples, real-world scenarios, and visual aids to ensure that these concepts stick in your mind and help you ace your exam.
📚 Don't forget, if you want to delve deeper into this topic, or if you need additional resources to further your studies, head over to prepnuggets.com. We have a plethora of materials waiting for you, from practice questions to comprehensive study guides tailored specifically for CFA Level II candidates.
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Пікірлер: 10

@newmercies1 Жыл бұрын

Excellent video, thank you so much.

@tradingwithcharts5470 4 ай бұрын

Much better and in-depth explanation compared to third party cfa notes

@rodrigomontoya1145 Жыл бұрын

Beautiful example.

@EK-eg8oh Ай бұрын

Shouldn’t the current service cost be the PV of defined benefit at retirement divided by total years of service (i.e. 10943/15) then be present valued at 7% for 14 years? The current service cost from year 1 to year to should approximate $282 this way?

@MbusoThabethe Жыл бұрын

Hi, thank you for the video. I however got lost when accumulating 8488x1.07^14 = 21 886. I could not relate this number to the PBO at the end of working for 16 years 10 929 (pmt 1556, i = 7, n 10, fv = 0) . Please assist. Many thanks

@greenlandpatriot Жыл бұрын

Is it 100000*1.03^*15*? or is it "^14"? The salary increase happens at end of year for the next year, so wouldn't it be 15-1?

@newmercies1 Жыл бұрын

Jason has already worked for 1 year = 100k and it is estimated that he will work for another 15 years, 16 years of work in total. So the calculation here is correctly posted for 15 years of increase @ 3% annually.

@bhanukumar9165 6 ай бұрын

Can anyone see a big mistake in the video?

@Vicsar212 3 ай бұрын

Earned benefit shouldn't be added to a previous earned benefit amount. It's just one amount that can change. The employee is only getting paid one annuity when they retire.

@mathias3026 2 ай бұрын

@@Vicsar212 I think they can add earned benefit to the previous amount since it only reflects the added future liability to the company, as a result of the employee working one additional year. It is the same as the first year, since the added liability is the same (i.e. a promise to pay annually until death; 1% of final salary of $155797 or $1558 per year).