Question

Employer contributions to a Public Employee Retirement System (PERS) should be reported as:

A) An expenditure of the General Fund for employees paid by the General Fund.
B) An expense of a proprietary fund for employees paid by a proprietary fund.
C) An addition in the PERS.
D) All of the above.

Answer 1

Employer contributions to a Public Employee Retirement System (PERS) should be reported as an expenditure of the General Fund for employees paid by the General Fund, an expense of a proprietary fund for employees paid by a proprietary fund, and an addition in the PERS. The correct answer is D) All of the above.

Step-by-step explanation:

Employer contributions to a Public Employee Retirement System (PERS) are an important aspect of employee compensation for public sector workers. These contributions are made by employers to help ensure that employees have a secure retirement. The proper reporting of these contributions varies based on the type of fund involved.

For employees who are paid by the General Fund, employer contributions to PERS should be reported as An expenditure of the General Fund. Similarly, for employees paid by a proprietary fund, these contributions should be reported as An expense of a proprietary fund. Additionally, these contributions are also an addition in the PERS, increasing the funds available for future pensions.

Therefore, the correct answer to the question is:

• D) All of the above.

Pension insurance requires employers that offer pensions to pay a fraction of what they set aside for pensions to the Pension Benefit Guarantee Corporation. This institution ensures that workers receive some benefits in case the company cannot fulfill its pension promises due to bankruptcy. Furthermore, pension funds are designed to grow through investments in various financial instruments, providing workers with a sum of money during their retirement years.