By NEAS - 5/2/2018 1:40:21 PM
FA Module 14: Employee pensions and share-based compensation – homework assignment
(The attached PDF file has better formatting.)
Homework assignment: Defined benefit pension plan
A defined benefit pension plan has the following entries for 20X1.
● Employer contributions 80
● Current service costs 10
● Past service costs 30
● Discount rate used to estimate plan liabilities 6%
● Benefit obligation at beginning of year 5,000
● Benefit obligation at end of year 4,800
● Actuarial loss due to increase in plan obligation 50
● Fair value of plan assets at beginning of year 4,500
● Actual return on plan assets 280
● Expected rate of return on plan assets 8%
Compute the following for 20X1:
A. What is the total service cost?
B. What is the interest cost on the benefit obligation?
C. What are the pension benefits paid during the year?
D. What is the periodic pension cost?
E. What is the fair value of the plan assets at the end of the year?
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