With Pensions, Service Cost Reflects Additional Benefits Employees Earn from an Additional

Multiple Choice

With pensions, service cost reflects additional benefits employees earn from an additional year's service. The service cost for retiree health care plans is:

A) An allocation to the current year of a portion of an estimated fixed total cost.
B) An allocation to the current year of a portion of an existing liability.
C) An amount earned by a defined benefit formula.
D) The amount paid to retired employees.