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Question 1 A company that makes an annual contribution of P 500 000 per annum identified a surplus of P1 500 000. The estimated service

Question 1

A company that makes an annual contribution of P 500 000 per annum identified a surplus of P1 500 000. The estimated service lives of current employees is 12 years. The actuary recommends the following options:

  1. A contribution holiday of 4 years
  2. A lump sum refund to the employer
  3. Pay employees higher pensions

Required: Accounting treatment under each of the three options recommended by the actuary

Question 1

A company that makes an annual contribution of P 500 000 per annum identified a surplus of P1 500 000. The estimated service lives of current employees is 12 years. The actuary recommends the following options:

  1. A contribution holiday of 4 years
  2. A lump sum refund to the employer
  3. Pay employees higher pensions

Required: Accounting treatment under each of the three options recommended by the actuary

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