Question

gain-pensions, are given below. Projected benefit obligation Plan assets Funded status Prior service cost-AOCI Net gain-AOCI ($ in 00s) 2018 2018 Beginning Ending Balances Balances $4,000 $ 4,501 4,400 4,791 400 290 425 400 460 395 Retirees were paid $250,000 and the employer contribution to the pension fund was $265,000 at the end of 2018. The expected rate of return on plan assets was 10%, and the actuary's discount rate is 8%. There were no changes in actuarial estimates and assumptions regarding the PBO. Required: 1. Determine the actual return on plan assets of 2018. 2. Determine the loss or gain on plan assets of 2018. 3. Determine the service cost of 2018 4. Determine the pension expense of 2018. 5. Average remaining service life of active employees (used to determine amortization of the net gain) 1. Actual return thousand 2. thousand 3. Service cost thousand 4. Pension expense thousand

Answer 1

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Date Solution Determine the actual return on plan estet of 2018 The computation ($ in coo's) 8 as follows : Plant assets Beginning of 2018 4,400 Actual Return Cash Contributions Lesso Retiree benefits End 4,791 376 265 250 al 2018 4400 t ut 265-250=4,791 u=376 21 Loss gain Expected Retewin on plan assets of 2018 $440 (10%* 4,400) Actual Return (376) Loss on plant assets $ 64 31 Service Cost of 2018 . PBO: Beginning of 2018 4,000 Service cost ? 431 Interest cost 320 (8% 4000) Los (gain! PBO Less: Retinal Benefits (250) End al 2018 $450L Service Cost = 4501-4000 - 320 +250 = 431 Scanned by TapScanner

Date us Pension Expense Service cost 431 Interust cost 320 Expected return (440) Amortization of: prior service Cost - Aoci 25 net gain - Aoci $ 335 ريا - 5. Average remaining sewice life of active Employees. Nel gain, Juni 10 % of $4,400 Excess $20 Amount amwitired Average sowice period 460 440 을 20 Years. - Scanned by TapScanner