A projected benefit obligation (PBO) is an actuarial measurement of what a company will need at the present time to cover future pension liabilities. This measurement is used to determine how much must be paid into a defined benefit pension plan to satisfy all pension entitlements that have been earned by employees up to that date, adjusted for expected future salary increases.
- A projected benefit obligation (PBO) is an actuarial measurement of what a company will need at the present time to cover future pension liabilities.
- Projected benefit obligation (PBO) assumes that the plan will not terminate in the foreseeable future and is adjusted to reflect expected compensation in the years ahead.
- Actuaries are responsible for using the projected benefit obligation (PBO) in order to calculate whether or not pension plans are underfunded.
