Question

Pension plan calculations.
The following information is for the pension plan for the employees of Payne, Inc.

		12/31/17	12/31/18
	Accumulated benefit obligation	$2,800,000	$3,760,000
	Projected benefit obligation	3,200,000	4,000,000
	Fair value of plan assets	3,230,000	3,630,000
	AOCI – Net (gain) or loss	(425,000)	(480,000)
	Settlement rate	8%	8%
	Expected rate of return	7%	6%

Payne estimates that the average remaining service life is 15 years. Payne's contribution was $450,000 in 2018 and benefits paid were $260,000.

Instructions

(a)	Calculate the interest cost for 2018.
(b)	Calculate the actual return on plan assets in 2018.
(c)	Calculate the unexpected gain or loss in 2018.
(d)	Calculate the corridor for 2018 and the amortization of the net gain for 2018.

Answer 1

© 5/31/18) @ Compulation of the interest card for 2016 Intern d cant (prese nta u sellegedly ($ 3200,000 X 8%) Porteros) cool - $256000 Came? Compulation of the action return on plan assets in 2018 . Favire value of plan assets - $ 3630,000 Fegie value of plan anels - $(32 30,000) Condherbu lions = 8 ( 450.000) Benefit paid Actual reforem on planosets T 230,000 $42) © Competalion of the enezpocked gain or los in 2018. Actuel relown on plan aseks" - $ 230,000 Expeecleol resteren Cherpected gain fr 16,200 A $13230,000) 9/3/18) = 2.00.000 is $ 260,000 = $ 193.800 ''C$ 3230,000% 6%)

om NU © Compulation of the connöreloc for 2018 ($ 3230,000 X 100%) = $323000 ($3200,000 X 10.5.). - $320,000 : The conciclon is the longer : /322000|am) ($ 425000 -- 323000) = $102000 Amortization of ned gain F 102 000 1901 Amortization of new you r 15 years) ar - 46500. C4mg).