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What kind of pension plans does P&G provide its employees?

Category: Human Resource Management Paper Type: Online Exam | Quiz | Test Reference: APA Words: 500

1)   What kind of pension plans does P&G provide its employees?

P&G provides several benefits to its employees including pension. These post-employment benefits are provided to employees all over the world. This plan provides health care and life insurance for its retired employees. These plans are fully funded. Retired employees pay stated percentage of health benefit. The post retirement plans are known as contribution plans which are provided to almost every US employee. The pension is given on the basis of years of service and salary which and employee had when he was in service. In case of US the contribution plans is made annually and increase or decreases by margin of 10%. Net for this plan is nearly 14% of ages of total number of participants.

2)   What was P&G’s pension expense for 2018, 2017 and 2016 related to its defined benefit plan?

Defined benefit plan of P&G is partially funded and it is available for selective employees.  In 2018, average return on pension asset is 6.8% and on OPEB plans is 8.3%. The expense for 2018, 2017 and 2016 for defined benefit plan for year 2018 is $292, for year 2017 it is $270 and for 2016 it is $292.

3)   What is the impact of P&G’ pensions plan for 2018 on its financial statements?

For the year 2018, the P&G’s financial statement was 8.3% for pension plans.

Change in benefit Obligation

PENSION BENEFITS IN 2018

Benefit obligation at the start of year

$ 60,160

Service cost

$ 280

Interest cost

$ 348

Participant’s contribution

$ 13

Amendments

$ 12

Special termination benefits

$ 8

Currency translation and other

$ 148

Benefit payments

$ 589

BENEFIT OBLIGATION AT THE END OF YEAR

$ 15,658

 

CHANGE IN PLAN ASSETS

PENSION BENEFITS

Fair value of plan assets at beginning of year

$ 10, 829

Actual return on the plan assets

$ 553

Employer contributions

$ 406

Participant’s contribution

$ 13

Currency translation and other

$ 55

Benefit payments

$ 589

FAIR VALUE OF ASSETS AT THE END OF YEAR

$ 11, 267

Funded status

$ 4,391

 

4)   What information does P&G provide on the target allocation of its pension assets? (Compare the asset allocation for “Pensions and Other Retiree Benefits.”) How do the allocations relate to the expected returns on these assets?

When asset allocation for pensions and other retiree benefits were compared funded status was $ 4,391 in 2018 for pension and it is $ 1,519 for retiree benefits in the similar year. Actual return on pension benefits for year 2018 is $ 553 while the figure $ 481 for same year in case of retiree benefits. The planned assets are diversified by many investor managers and liquid funds are selected. To figure out broad market equity

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