amortized gains or losses

Often referred to as the actuarial gains or losses, this is one of five components of pension expense. The other components are service cost, interest cost, expected return on assets and amortized prior service cost.

The amortized gains or losses refer to the differences between expected return on plan assets and actual return on plan assets that surpass the corridor. The corridor refers to the amount equal to 10% of the PBO or the FV of plan assets.

The amortized gains or losses of pension expense may increase or decrease the expense depending on the differences between actual and expected return on plan assets. If the actual return is greater than the expected, this would result in a gain, and thereby a decrease in pension expense. Inversely, if the actual return is less than the expected return, this would result in a loss, and thereby increase pension expense.

Synonyms:
actuarial gains or losses