I am looking at an annual report from a company, with the goal being to assess the financial standing of their pension plan. I have come across a chart that outlines the companies pension liabilites, expressed as both Projected Benefit Obligations (PBO) and Accumulated Benefit Obligations (ABO).
Under these 2 different models, one shows an under funding of the pension plan for the year, and the other shows an over funding.
My question is, how can I say 'for the year 2017, 'company A underfunded their pension plan' or 'company A over funded their pension plan' if the 2 models show different values? I believe my confusion is in the fact that the year 2017 is over, and so there was a definitive amount that was paid out to retirees who are a part of the pension plan, but I'm having trouble quantifying this with the 2 different models. Any help would be appreciated.
The chart that I'm looking at shows the pension plans total assets, and then expresses over/under funding with respect to both PBO and ABO, but I'm having trouble understanding the PBO aspect for a year that is already completed.