Commonly used OPEB accounting terms
Accounting terms mentioned throughout our website may not be familiar to everyone and so we’ve complied a list of common terms related to FASB and GASB OPEB accounting standards.
There are currently 9 terms in this directory beginning with the letter P.
Pay-as-you-go
To record on an organization's books according to when the cash payment was made rather than when the transaction giving rise to such payment occurred; e.g. In the example shown in the definition of "accrued", the $1,000 would be considered as earned in 2021 since that is the year in which it was paid.
Pension benefits
Retirement income and all other benefits, including disability benefits, death benefits, life insurance, and other ancillary benefits, except healthcare benefits, that are provided through a defined benefit pension plan to plan members and beneficiaries after termination of employment or after retirement. Postemployment healthcare benefits are considered other postemployment benefits, whether they are provided through a defined benefit pension plan or another type of plan.
Plan assets
Resources, usually in the form of stocks, bonds, and other classes of investments, that have been segregated and restricted in a trust, or in an equivalent arrangement, in which (a) employer contributions to the plan are irrevocable, (b) assets are dedicated to providing benefits to retirees and their beneficiaries, and (c) assets are legally protected from creditors of the employer(s) or plan administrator, for the payment of benefits in accordance with the terms of the plan.
Plan liabilities
Obligations payable by the plan at the reporting date, including, primarily, benefits and refunds due and payable to plan members and beneficiaries, and accrued investment and administrative expenses.
Plan members
The individuals covered by the terms of an OPEB plan. The plan membership generally includes employees in active service, terminated employees who have accumulated benefits but are not yet receiving them, and retired employees and beneficiaries currently receiving benefits.
Postemployment
The period between termination of employment and retirement as well as the period after retirement.
Postemployment healthcare benefits
Medical, dental, vision, and other health-related benefits provided to terminated or retired employees and their dependents and beneficiaries.
Postretirement benefit increase
An increase in the benefits of retirees or beneficiaries granted to compensate for the effects of inflation (cost-of-living adjustment) or for other reasons. Ad hoc increases may be granted periodically by a decision of the board of trustees, legislature, or other authoritative body; both the decision to grant an increase and the amount of the increase are discretionary. Automatic increases are periodic increases specified in the terms of the plan; they are nondiscretionary except to the extent that the plan terms can be changed.
Projected salary increase assumption
An actuarial assumption with respect to future increases in the individual salaries and wages of active plan members; used in determining the actuarial present value of total projected benefits when the benefit amounts are related to salaries and wages. The expected increases commonly include amounts for inflation, enhanced productivity, and employee merit and seniority. Single-employer plan - A plan that covers the current and former employees, including beneficiaries, of only one employer.
