Current costs of a pension plan that occur each year due to service credits earned after the inception of the plan are called:
A) Interest costs.
B) actuarial losses.
C) Past service costs.
D) service costs.

Question

Quizplus · Accepted Answer

Service costs represent the current costs of a pension plan that occur each year due to service credits earned after the inception of the plan. Interest costs are the costs of financing the plan, actuarial losses are the losses that occur when assumptions about the plan's future performance do not hold true, and past service costs are costs that arise from changes made to a plan's benefits that apply to periods of service already completed by employees.

Current Costs of a Pension Plan That Occur Each Year