Coca Cola vs. Pepsi Cola Research Paper Example | Topics and Well Written Essays - 1000 words

Coca Cola vs. Pepsi Cola - Research theme ExampleThe Company recognizes the cost of post seclusion benefits, which consist principally of medical benefits, during employees periods of active service. The Coca-Cola Co. is adopting a cash-balance pension off program for new and current employees. Under the cash-balance object design, employees will receive annual age-heighted credits equal to a percentage of pay. Those credits will start at 3 percent of pay and increase with age. Employees cash-balance plan accounts also will be credited with interest. Coca-Colas move to a cash-balance plan comes at a time when many major employers are phasing out their defined-benefit plans and offering only defined-contribution plans. But Coca-Cola executives rejected such(prenominal) an approach. Coca-Cola, which last year reported $31.9 billion in operating revenueup from $28.9 billion in 2007is the third major employer to adopt a cash-balance plan since 2006, when Congress passed the Pension P rotection Act. On the early(a) hand a pension from PepsiCo is an important benefit that can help employees make the most of their retirement years. Add Social Security, any benefits payable from other PepsiCo plans as well as personal savings, and employees expect the formula for a sound financial future. To be eligible to participate in a PepsiCo pension plan, one must be either a full-time employee or a part-time employee work at least 1,000 hours in a year at PepsiCo or a subsidiary of PepsiCo that sponsors the plan. The scoop part about Pepsis pension benefit is that it is provided to employees at no cost. Employees do not score to contribute any of their current compensation to receive a pension. There are no paysheet deductions from their pay check and there are no out-of-pocket costs to pay. PepsiCo contributes amounts on employees behalf to the jut out for their exclusive benefit in accordance with Federal tax law. Measurement of Pension Costs and Obligations The fin is of pension costs and obligations is based on the attribution of pension benefits to periods of employee service and the use of actuarial assumptions to account the present value of such benefits. Actuarial assumptions reflect the time value of money and the probability of payment. The pursuit three key economic assumptions determine pension costs The discount rate The salary scale of handbillment The expected long-term rate of return on plan assets Pepsis Annual pension and retired person medical expense amounts are principally based on following components (1) the value of benefits earned by employees for working during the year (service cost), (2) increase in the liability due to the passage of time (interest cost), and (3) other gains and losses as discussed below, reduced by (4) expected return on plan assets for their funded plans. Significant assumptions employ to measure Pepsis annual pension and retiree medical expense include the interest rate used to determine th e present value of liabilities (discount rate) certain employee-related factors, such as turnover, retirement age and mortality for pension expense, the expected return on assets in their funded plans and the rate of salary