Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 20 - Accounting for Pensions and Postretirement Benefits - Review and Practice - Questions - Page 1161: 1

Answer

A private pension is a privately set up pension scheme to provide the pensioners registered under it with benefits that can be accurately valued in advance once they retire. This is a product designed to help members save money and invest. The main difference between contributory and non-contributory plan is on the cost burden where in a contributory plan, the employees bare a portion of the cost, while in a non-contributory scheme, the employer bares the burden for the whole cost.

Work Step by Step

As summarized above.
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