Pension Plans

Question 1

Calculate G/L Amortization using the Corridor Approach

Answer 1

1. Find Larger of PBO or Fund Assets
2. Multiply Step 1 x 10%
3. Determine if amortization is needed:
   Unrecognized G/L > Step 2 –Yes
   Unrecognized G/L

Question 2

Calculate Gain/Loss in SIR AGE

Answer 2

Gain/Loss= Actual Return - Expected Return

Question 3

Calculate Funded Status

Answer 3

Funded Status = FV - PBO

Question 4

Calculate Interest Cost

Answer 4

Interest Cost = Beg PBO x Discount Rate

Question 5

Calculate Actual Return on Plan Assets

Answer 5

Actual Return on Plan Assets: 
Beg FV
\+ Contributions
\+Actual Return
-Benefits Paid
=Ending FV

Question 6

Calculate Expected Return

Answer 6

Expected Return = Beg FV x Expected Return %

Question 7

Calculate Amortization of Unrecognized Prior Service Costs

Answer 7

Amort Prior Service Costs = Beg Unrecognized Prior Service Cost / Avg remaining service life