kashifafridi

Defined benefit plans are POST Employment schemes. Meaning workers access the pension after they have left the job possibly until death.
Because these are paid in the future.. lies their subjectivity, meaning the employer cant exactly know how much they will pay, exactly when they will pay and variable discount rates.
Therefore, this creates an Obligation payable in the future.This must be measured in today's value... thus Discounting of the future Obligation.
There are also Two types of cashlows here are Contributions Into the plan as may be advised by the actuary actuary, 2. Benefits or Actual pension payments made.

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