Which of the following statements is not accurate with respect to accounting for other post-retirement plan benefits (OPEB)?
A. A decrease in the discount rate assumption used may lead to a large gain for a company.
B. A company which shifts its former salaried employees from its post-65 retiree health plan to spending accounts that allow participants to buy health care from private exchanges creates a reduction in earned benefits referred to as a negative plan amendment.
C. The actuarially determined service cost of the plan is accrued over the required years of service to participate in the postretirement benefit plan (e.g. 10 years).
D. Firms are required to make sensitivity disclosures regarding the effect of a 1% increase or decrease in the health care trend rate assumption.
Answer: A
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