12, Disclosure of Information on Postemployment Benefits Other Than Pension Benefits by
State and Local Governmental Employers; paragraphs 12 and 44 of GASB Statement No.
31, 1991, P's recalculated benefits are excludible from gross income depends on whether the Plan determines P's benefits by
reference to his length of service.
To provide cost-neutral or unsubsidized early retirement benefits at age 55, the company would have had to reduce those benefits by
as much as 60 percent of the age-65 benefit.
Thus, the regulations would preclude General Signal from pre-funding expected 1987 health and short-term disability benefits by
the end of 1986.
Accounting for retiree benefits by
reporting only the current year's costs hides the fact that the employer has a continuing financial obligation.
From a societal perspective, STETS' costs outweigh benefits by
nearly 20 percent, producing a net societal benefit of -$1,039 and a benefit-cost ratio substantially less than 1.
412(c)(3)-1(f) allows qualified pension plans to fund ancillary benefits, such as preretirement death benefits, and allows taxpayers to compute deductions for such benefits by
using either (1) the same method used to compute retirement benefit costs or (2) the premium paid under an insurance contract.
In many cases, the substance of a plan includes a policy of reacting to changes in the cost of benefits by
changing, for instance, a plan's cost-sharing provisions.
The FASB would require most companies to switch to accrual accounting for retiree health care and other postretirement benefits by
1992 and would require a "minimum" liability to be recorded on the balance sheet by 1997.
With the former, a surgeon who still could teach would not be eligible for benefits by
reason of being able to perform an occupation for which he was reasonably qualified.
Employers using utilization review must be prepared to justify denials of benefits by
those utilization reviewers, even when made before the fact, with specific reasons why those denials occurred.
An individual's income history can be use to determine the impact of a flexible spending account on future social security benefits by
taking into consideration the employee's marginal PIA rate; the Federal income tax rate; the potential effect on the earned income credit; the spouse's retirement situation; as well as state and local taxation.