Accumulated Benefit Obligation


Accumulated Benefit Obligation (ABO)

An approximate measure of the liability of a pension plan in the event of a termination at the date the calculation is performed. Related: Projected benefit obligation.

Accumulated Benefit Obligation

The present value of the future liability of an employee's pension, assuming that the employee is fired or retires on the date the calculation is performed. For example, the accumulated benefit obligation is what the pension fund must pay the employee should the employer make no further contributions and the employee retires immediately. The accumulated benefit obligation therefore assumes that the employee will make no further contributions to the pension plan. See also: Projected Benefit Obligation.