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The Coca-Cola Company and Pepsico Pension Plans

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The Coca-Cola Company and PepsiCo Pension Plans
Intermediate Accounting III – ACC 305
Strayer University
November 20, 2011

Abstract The Coca-Cola Company and PepsiCo are both very large manufacturing corporations that operate worldwide. Over the years, each corporation has had a very longevity of business success. The expansion of business and brands through subsidiaries, partnerships and franchises in beverage and food products has been a consistent growth in retail sales for both corporations. With such growth, they employ thousands of employees worldwide and offer competitive benefits to include medical, life, and retirement. In 2006, both corporations adopted SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). For this particular paper, the goal will be to complete a comparative analysis of the pension plans that each corporation make available to their employees and retirees. Analysis A pension plan is an employer contributory or noncontributory saving plan which can also be qualified and nonqualified that businesses offer to their employees to assist with their retirement. With contributory plans, the employer and the employee make contributions into the savings. Whereas, with noncontributory plans, only the employer is required to make the contributions while the employee’s participation is optional. Under a qualified plan, tax deduction benefits and other incentives are offered to the employer and meet certain governmental set guidelines. With the nonqualified plan, there are no tax benefits or any other incentive to the employer. The Coca-Cola Company subsidizes for its U.S. employees; pension and postretirement plans that are both qualified and nonqualified. Under the defined contribution plan and for the

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