Does your Small Business offer a Pension Plan?

2/26/2016

What is PBO?

Are you a small business owner planning to offer new or additional benefits to your employees? Have you discussed this idea with your accountant? Do you understand what this means for your business?

The Houston Chronicle published an article, "How to calculate projected benefit obligation", for small business owners in which it provides insight to what a pension plan, specifically the PBO pension, means for management and the employee and how to calculate it.

The projected benefit obligation (PBO) is a pension concept in accounting. The PBO is the present value of an employee's pension. For a small business, the PBO will be an amount the company needs now in its pension plan to cover future pension obligations to its employees. Generally, companies will use an actuary for this calculation due to the complexities of pensions.

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