The actuarially calculated amount, either in dollars or a percent of salary, that is required to be paid each year to help keep a pension plan fully funded.
*ARC calculations are no longer mandatory, but many plans have continued to use them. Though ARC has been a useful tool when comparing plans, sponsors have a lot of latitude in the assumptions and methods to calculate the ARC. In addition, many plans have no requirement to pay the full ARC. The Governmental Accounting Standards Board rules now require reporting of the Actuarially Determined Employer Contribution (ADEC), but only in a supplemental section of the plan’s annual report, along with a new requirement to report on the contribution amount actually paid.