Vested Benefit Obligation - VBO
Definition of 'Vested Benefit Obligation - VBO'The actuarial present value of pension plan benefits belonging to employees of an organization. The vested benefit obligation (VBO) is one measure of a pension fund's liability. The VBO only considers benefits that have vested in an employee, as opposed to the accumulated benefit obligation (ABO), which represents the present value of any benefits, whether vested or not. |
|
Investopedia explains 'Vested Benefit Obligation - VBO'Since minimum vesting requirements are generally five years, the values of the vested benefit obligation and accumulated benefit obligation are very close in most pension plans. While the ABO and VBO values are required to be disclosed at fiscal year-end, in cases where the values are almost similar, companies' financial statements show the ABO value and state that the VBO and ABO values are not materially different. |
Related Definitions
Articles Of Interest
-
The Investing Risk Of Underfunded Pension Plans
Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan. -
Combining Your Plan Assets? Not So Fast!
You might reduce the costs of maintaining more than one account, but you could also be forfeiting tax benefits. -
A Primer On Defined-Benefit Pension Plans
Most of us will rely on a pension plan in the future, so it's best to know the details of the various plans before signing up. -
How To Evaluate Pension Risk By Analyzing Annual Costs
Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate. -
3 Reasons To Use An Employer-Sponsored Retirement Plan
If you aren't participating in your employer-sponsored retirement plan, you're missing out! Learn the benefits. -
Lump Sum Versus Regular Pension Payments
If you're about to retire, you may be facing this dilemma soon. Find out what your options are. -
10 Great Summer Jobs For Teens
There are a lot of summer jobs out there, find out what's available, how much it costs and what skills you need. -
Stop Keeping Up With The Joneses - They're Broke
Conspicuous consumption could be robbing you of future wealth. -
How To Start Saving For Retirement
If you establish these money-saving habits and patiently allow your wealth to build, you will be taking some huge steps forward in making your financial future more secure. -
The Path To Becoming A CEO
Think you have what it takes to be chief executive? Find out what those at the top have in common.
Free Annual Reports