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Business Definition for: actuarial basis of accounting

actuarial basis of accounting

used in computing the amount of contributions to be made periodically to a pension fund. Total contributions plus the accumulated earnings on it must equal the required payments to be made out of the fund. Factors that must be considered are the length of time over which each contribution is to be held and the return on investment. A "Trust Fund" for a public employee retirement system is an example of a fund set up on an actuarial basis.

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