Question

The projected benefit obligation was $180 million at the beginning of the year. Service cost for the year was $22 million. At the end of the year, pension benefits paid by the trustee were $12 million and there were no pension-related other comprehensive income accounts requiring amortization. The actuary's discount rate was 5%. The actual return on plan assets was $11 million although it was expected to be only $10 million What was the pension expense for the year? millon Pension expense million

Answer 1

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	Pension expense	=	$                  21	million
	Workings:
			($ in million)
	Service cost	=	$                  22
Add:	Interest cost ($180 million X 5%)	=	$                    9
Less:	Expected return on plan assets	=	$                  10
	Pension expense	=	$                  21