Question

The information below pertains to the retiree health care plan of Thompson Technologies: Accumulated postretirement benefit obligation Plan assets Funded status Prior service cost-AOCI Net gain-AOCI ($ in 00s) 2018 2018 Beginning Ending Balances Balances $ 550 $ 575 75 (550) (500) 190 156 (64) (63) Thompson began funding the plan in 2018 with a contribution of $141,000 to the benefit fund at the end of the year. Retirees were paid $52,000. The actuary's discount rate is 4%. There were no changes in actuarial estimates and assumptions.

Answer 1

Thompson Technologies Requirement 1 ($ in 000s) 550 APBO: Beginning of 2018 Service cost Interest cost Loss (gain) on APBO Less: Retiree benefits End of 2018 22 550 x 4% -52 575 Service cost = $575 - 550 - 22+52 = $55 Requirement 2 ($ in 000s) 550 x 4% 22 0 Service cost Interest cost Return on plan assets Amortization of: Prior service cost Net gain Postretirement benefit expense 34 -1 110 190 - 156 64 - 63 Requirement 3 Accumulated postretirement benefit obligation Plan assets Net postretirement benefit liability ($ in 000s) 575 -75 500