alleryStart learning →What is it called when a plan's obligations outpace its assets?
AVesting
BAnnuitisation
CCommutation
DUnderfunding
Answer & Solution
Correct answer: D. Underfunding
When promised future benefits grow faster than the assets held to pay them, the plan is said to be underfunded.
Keep practising Employee Benefits
Browse all Employee Benefits questions for CA Inter, or explore more Accounting topics.
Related questions
Employee benefits mainly aim to increase what for staff?Which US plans let employees choose from a menu of benefits?Employees tend to see mandated benefits as creating what?Which body coined the term fringe benefits during World War II?What is exchanging cash wages for another benefit called?In which year was India's fringe benefits tax abolished?The IASB defines employee benefits as consideration for what?Who prepared the 1943 report that shaped India's health insurance scheme?