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Moody’s: Schools suffer as unfunded pension liabilities grow

OCTOBER 25, 2018 | by Rupert Hargreaves | VALUEWALK

“Under the previous model, the Fed relied on an 'accrued benefit obligation,' or 'ABO,' approach to measuring liabilities. … As pension benefit formulas are typically based on higher average salaries, which tend to occur towards the end of an employees career, ABO accounting can give somewhat of a misleading estimate of future pension obligations. Instead, the Fed has now adopted a 'projected benefit obligation,' or 'PBO,' approach. This method of accounting recognizes assumed future salary growth …”

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