Reading 14 Concepts: PBO Vs Total Future Liability

[pistachioca]

What’s the difference between PBO and Total Future Liability?
The CFAI textbook makes it sounds like TFL = PBO + ABO
However, doesn’t PBO already include ABO?

 

[Influence]

Yes, PBO already includes ABO.
So no, it is not true that TFL = PBO + ABO. The base way to understand this is to think of TFL as including both past and future service for active employees, while both PBO and ABO only include past service; while PBO projects future salaries (but not future service), ABO does not.
Hope this helps.