Question

The actuary for the pension plan of Bridgeport Inc. calculated the following net gains and losses.

Incurred during the Year		(Gain) or Loss
2020		$301,000
2021		475,500
2022		(209,400)
2023		(287,600)

Other information about the company’s pension obligation and plan assets is as follows.

As of January 1,		Projected Benefit Obligation		Plan Assets (market-related asset value)
2020		$3,968,000		$2,421,100
2021		4,529,000		2,190,800
2022		4,987,000		2,586,100
2023		4,202,300		3,050,400

Bridgeport Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 6,000. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2020, 2021, 2022, and 2023. Apply the “corridor” approach in determining the amount to be amortized each year. (Round answers to 0 decimal places, e.g. 2,500.)

Answer 1

Answer! Expected future years of Service of employees = Average service life per employee. - 6000/400 = 15 years Gain or loss for the year L 2020 $301,000 2021 $ 475,500 $ 209.400) 2083 16287600) 2022 Years projected Benefit olan Asset obligation (P.BO) corridor -PBD Accumulated Minimum Amor XOX locI (G/L) tisation Gain/ cony 2020 $3968 DOO 2021 $4,529,000 2022 $ 4,987,000 $2,421100 $ 2,190,800 $2,586,100 $396800 $ 452900 $498700 $0 $0 $ 301.000 $776,500 18,520 30,000+ 475500] $548.580 1$8557 2023' 4202300 $1050400 $ 420,230 I working notes 0976500 - 498700)/15 = 18520 2) 776500–18520 - 209400 = $548,580 3) (548,580 – 4202306 = 8557