Guest tintree73 Posted June 30, 2004 Posted June 30, 2004 Forgive me if this is a "basic" question - but would FAS 106 apply to retiree health benefits provided through insurance? I ask b/c my employer wants to institute a retiree health plan - basically to cover one of the owners who is considering retirement (kids are taking over) with appropriate Firestone language (I think that is the case where you put the language indicating that the benefits may be amended/modified at anytime, etc.) and provide it to all employees, etc. I would appreciate any help you are able to send my way! Thanks!
MGB Posted June 30, 2004 Posted June 30, 2004 Yes, it applies. It doesn't make any difference how the services are purchased, it is a liability that should be accounted for over working lifetimes.
Guest tintree73 Posted July 1, 2004 Posted July 1, 2004 Ok, they were not keen on that idea. Here's the next idea they came up with: What about keeping the retiring owner on an extended medical leave. This would initially be FMLA protected leave, but that would eventually run out. Do you see any problems with this (other than that they would have to provide it to every employee who went out on leave and it may not be covered by the insurance contract). Would a top-hat plan be a solution? Thanks!
MGB Posted July 1, 2004 Posted July 1, 2004 Now you are invoking SFAS 112 instead of SFAS 106, with a full recognition of the liability (not pay as you go).
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