Question

The actuary for the pension plan of Marigold Inc. calculated the following net gains and losses.

Incurred during the Year		(Gain) or Loss
2020		$301,100
2021		476,000
2022		(209,300)
2023		(287,700)

Other information about the company’s pension obligation and plan assets is as follows.

As of January 1,		Projected Benefit Obligation		Plan Assets (market-related asset value)
2020		$4,027,200		$2,403,600
2021		4,507,600		2,187,600
2022		5,029,300		2,602,800
2023		4,200,500		3,026,800

Marigold Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 4,400. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2020, 2021, 2022, and 2023. Apply the “corridor” approach in determining the amount to be amortized each year.

Answer 1

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