Other post-retirement benefits (OPRBs) are those benefits, other
than pension, available to employees after they retire. I have chosen
to discuss Health insurance because I feel that health insurance is the
most important post-retirement benefit. When people reach
retirement age, they are older, and more likely to require additional
regular and/or frequent medical care, which is seemingly impossible
to afford without health insurance.
Pension benefits and OPRBSs such as health insurance, life insurance,
disability insurance, and deferred compensation. One similarity
between health insurance and pension is that they both require the
business to use accrual basis accounting. a Both pension and OPRBs
are recorded as liabilities and costs are accrued during the
appropriate periods.
A couple of main differences between pension and healthcare is that
pension is a fixed dollar amount, where healthcare varies widely, and
typically increases annually. a It is typical of businesses to have a group
plan specifically for retirees, and also common for retirees to be
enrolled in Medicare, which pays their portion of care first. Another
main difference is the beneficiary. a Pension is paid to the employee,
while healthcare benefits the employee, their spouse, and/or their
dependents, if enrolled.
I personally feel given the choice between pension and OPRBs, such
as healthcare, a business would be more likely to choose pension. a It is
less maintenance for the business, less variable, and they receive tax
benefits for their contributions.
References:
Kagan, J. (2021, May 19).
What are other post-employment benefits
(OPEB)?
Investopedia. Retrieved from
https://www.investopedia.com/terms/o/opeb.asp
Whalen, J. M., Jones, J. P., & Pagach, D. P. (2017).
Intermediate
Accounting: Reporting and analysis
. Boston, MA: Cengage Learning
