definition of vested benefit obligation vbo 
vested benefit obligation vbo refers to the actuarial present value of the pension plan that has been earned by employees and is one measure of a firm s pension fund liability understanding vested benefit obligation vbo vested benefit obligation vbo is one of three approaches firms use to measure and disclose pension obligations as well as the performance and financial condition of their plans at the end of each accounting period as they are required to under fasb statement of financial accounting standards no 87 1 the other two measures are the firm s accumulated benefit obligation and projected benefit obligation the vbo is the portion of the accumulated benefit obligation that employees will receive regardless of their continued participation in the company s pension plan this is the benefit that has vested in employees as opposed to the accumulated benefit obligation which represents the present value of any benefits whether vested or not the employee retirement income security act erisa of 1974 requires companies to vest benefits using one of the following two approaches since minimum vesting requirements are generally five years the values of the vested benefit obligation and accumulated benefit obligation are very close in most pension plans while the abo and vbo values are required to be disclosed at fiscal year end in cases where the values are almost similar companies financial statements show the abo value and state that the vbo and abo values are not materially different 