2. Pension benefits are not being funded adequately on an actuarial basis. 3. Increase in unpaid Contributions (The system did not co
2. Pension benefits are not being funded adequately on an actuarial basis. 3. Increase in unpaid Contributions (The system did not co
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Give recommendations for fixing each of the following issues pertaining to a defined benefit pension plan.
1. The actual amounts contributed to the system by government employers have been much lower than the actuarially determined contribution amounts.
2. Pension benefits are not being funded adequately on an actuarial basis.
3. Increase in unpaid Contributions (The system did not collect contributions from the retirees/employees and the Government).
4. Mismanagement of investments which caused a great loss in investment income.
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