Final answer:
The vested benefit obligation is calculated using only vested benefits at current salary levels and is critical for understanding a company's pension liabilities. These pension benefits are insured by the Pension Benefit Guarantee Corporation.
Step-by-step explanation:
Companies compute the vested benefit obligation using only vested benefits, at current salary levels. This measurement is a part of pension accounting and represents the portion of the pension plan's benefits that is attributed to the years of employee service up to the calculation date and is not contingent upon continued employment.
Considering that employers providing pensions are required to insure these benefits through the Pension Benefit Guarantee Corporation (PBGC), which secures pension benefits in the event of company bankruptcy, the vested benefit obligation is crucial in understanding the actual pension liabilities of a company.