Question

Indicate whether each of the following events increases (I), decreases (D) or has no effect (N) on the employer’s periodic pension expense, the projected benefit obligation, plan assets, unrecognized gain or loss and unamortized prior service costs under a defined-benefit pension plan.

Event	Pension Expense	Projected Benefit Obligation	Plan Assets	Gain– Other Comprehensive Income	Loss-Other Comprehensive Income	Prior Service Costs – Other Comprehensive Income
1. Interest Cost
2. Amortization of prior service cost
3. Service Cost
4. Actual return on plan assets
5. Actual return on plan assets in excess of expected return
6. Changes in actuarial assumptions that decrease benefits
7. Cash contributions to the pension fund by the employer
8. Benefits are paid to retired employees
9. A plan amendment that increases benefits is made retroactive to prior years
10. Amortization of a gain using the corridor approach

Answer 1

Event	Pension Expense	Projected Benefit Obligation	Plan Assets	Gain– Other Comprehensive Income	Loss-Other Comprehensive Income	Prior Service Costs – Other Comprehensive Income
1. Interest Cost	I	I	N	N	N	N
2. Amortization of prior service cost	I	N	N	N	N	D
3. Service Cost	I	I	N	N	N	N
4. Actual return on plan assets	D	N	I	N	N	N
5. Actual return on plan assets in excess of expected return	I	N	N	I	N	N
6. Changes in actuarial assumptions that decrease benefits	N	D	N	I	N	N
7. Cash contributions to the pension fund by the employer	N	N	I	N	N	N
8. Benefits are paid to retired employees	N	D	D	N	N	N
9. A plan amendment that increases benefits is made retroactive to prior years	N	I	N	N	N	I
10. Amortization of a gain using the corridor approach	D	N	N	D	N	N