Costs related to a new pension plan that are necessary to "catch up" for services rendered prior to the inception of the pension plan are classified as:
A) actuarial losses.
B) past service costs.
C) retroactive deferred charge.
D) service costs.
E) transition costs.

Question

Quizplus · Accepted Answer

Past service costs are costs related to services rendered prior to the inception of the pension plan that are necessary to catch up. This includes costs for retroactive benefit accruals or contributions that were not made in the past.

Costs Related to a New Pension Plan That Are Necessary