Past Service Liability
Barron's Business Dictionary:
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Past Service Liability
Funding of an employee’s benefits in a pension plan for his beginning past service of employment. This is a significant cost factor in pension planning and financing of future benefits.
| Past Service Benefit, Password, Passport | |
| Patch, Patent, Patent Infringement |
Barron's Insurance Dictionary:
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Past Service Liability
Employer’s obligation to fund a pension plan for the time period when employees were qualified to participate but the plan was not yet established. For example, a pension plan is established at XYZ Co. in 1985. Because John Smith started at the firm in 1975, he would have a past service credit for his 10 years of service before the plan started. For funding purposes, annual contributions are broken down into future service benefits and past service benefit. Past service liability is not funded entirely in the initial year of a plan, primarily because it would be too expensive, and the IRS requires that deductions be spread over 10 years.
| Past Service Benefit, Past Due Accounts, Passive Retention | |
| Past Service Liability—initial, Patent Insurance, Patterson V. Shumate |
