Legacy costs refer to the financial obligations that a company or organization incurs as a result of past decisions, particularly concerning employee benefits. These costs can include pension plans, retiree healthcare benefits, and other post-employment benefits that were promised to employees during their time of employment but that the organization must continue to pay even after those employees leave or retire. Legacy costs can have a significant impact on a company's financial health, often creating long-term liabilities that can affect cash flow and profitability.
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