Question

Traveltime Tours has a defined benefit pension plan. As a new employee, you are interested in the future well-being of the plan. To help you visualize your assessment, you use your Excel skills to graph the key numbers. The line graph below plots the balances of the company's Projected Benefit Obligation and its Plan Assets over the most recent six years. DEFINED BENEFIT PENSION PLAN Pension Plan Assets - Projected Benefit Obligation $35,000 $30,000 $25,000 $20,000 BALANCES $15,000 $10,000 $5,000 $0 1 2 3 4 5 6 YEAR Click here to open the graph(s) in a new tab. Required: 1. What was the funded status of Traveltime's pension plan in Year 2? 2. In which years did Traveltime report a Net Pension Liability? 3. In which years was Traveltime's pension plan overfunded? 4. What might have been the primary reason for the pension plan becoming overfunded?

Answer 1

Answers:
1	What was the funded status of Traveltime's pension plan in year 2?	$                                        24,000
2	In Which Years did Traveltime report a Net Pension Liability?	3.5 Years (Approx)
3	IN Which Years was Traveltime's pension plan overfunded?	6th Year
4	What might have been the primary reason for the the pension plan becoming overfunded?	Because in 6th Year, Assets are Higher by $ 5000 ($30,000-$25,000)