Exam 7: Pensions and Other Employee Future Benefits

Which of the following components does not relate to the assets/liabilities held in the pension trust for a defined benefit plan?

Which of the following best describes a "defined benefit plan"?

Which statement about "defined contribution plans" is correct?

What is the key distinction between amounts recorded through income as pension expense versus amounts recorded through OCI?

Which statement is correct?

What amount is included in the pension reconciliation for the income statement?

What is the pension expense for the following plan? "The plan requires the company to contribute $500 for each of its 1,000 employees.The plan hopes to accumulate enough funds so that each retiree receives $20,000 in the future; the company has no obligation to guarantee the investment returns."

Changing Assumptions Ltd.has the following details related to its defined benefit pension plan as at December 31,2013: Pension fund assets of $1,900,000 and Actuarial obligation of $1,806,317. The actuarial obligation represents the present value of a single benefit payment of $3,200,000 that is due on December 31,2019,discounted at an interest rate of 10%; i.e.,$3,200,000 / 1.10⁶ = $1,806,317. The pension has no unamortized experience gains or losses,and no past service costs at the end of 2013.Funding during 2014 was $55,000.The actual value of pension fund assets at the end of 2014 was $2,171,000.As a result of the current services received from employees,the single payment due on December 31,2019 had increased from $3,200,000 to $3,380,000. Required: a.Compute the current service cost for 2014 and the amount of the accrued benefit obligation at December 31,2014.Perform this computation for interest rates of 8%,10%,and 12%. b.Derive the pension expense for 2014 under various assumptions about the expected return and discount rate.Complete the following table: c.Briefly comment on the different amounts of pension expense in relation to the assumptions for expected return and discount rate.How does a change in the discount rate affect the accrued benefit obligation?

Regarding the presentation and disclosure of pension plans,which statement is true?

Prepare the Summarized Pension Actuary's Report on Pension Plan Obligations (without numbers)in good form.

What amount will be presented on the balance sheet for fiscal 2017?

If a company provides a non-contributory pension plan,who makes the contributions?

What are actuarial losses or gains in a defined benefit plan?

Humid Furnishings produces quality household furniture.The company has only one defined benefit pension plan,which covers its 30 carpenters.The company has completed its accounting for the year and closed its books.The draft financial statements show a defined benefit asset of $90,000.Your review of the company's records shows that the pension plan has a deficit of $50,000.The company's working papers show that $80,000 of actuarial losses remain unamortized at year-end,and $16,000 of past service cost was amortized during the year. Required: Determine the number of years that remain until employees are entitled to receive the additional benefits related to the past service cost.

A company has a defined benefit pension asset of $1,050,000 at the beginning of the year.The company contributes $5,500,000 to the pension during the year and records a pension expense of $8,200,000. Required: Determine the value of the defined benefit pension liability at year-end.

At the beginning of the current year,a pension has assets of $46,600,000 and accrued benefit obligation of $58,500,000.During the year,the sponsor recorded $3,100,000 in pension expense and contributed $5,000,000 to the pension plan.At the end of the year,the plan assets had fair value of $50,400,000 while the plan obligations had a present value of $60,000,000. Required: Compute the amount of other comprehensive income relating to the pension plan for the year.

KitKat Singh is currently 30 years old and he plans to retire early,in 25 years' time.He would like to have an income of $50,000 per year during his retirement,which he anticipates will last for another 30 years.Assume that he receives the retirement income at the end of each of the 30 years. Required: Determine the amount of money he will need to have accumulated by the time he starts his retirement.Assume a discount rate of 5%.

What amount will be presented on the balance sheet for fiscal 2017?

What are past service costs in a defined benefit plan?

Katherina is currently 30 years old and plans to retire later in life.She would like to have an income of $35,000 per year during her retirement,which she anticipates will last for another 25 years.Assume that she receives the retirement income at the end of each of the 25 years. Required: Determine the amount of money Katherina will need to have accumulated by the time she starts her retirement.Assume a discount rate of 5%.