Question

Oriole, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2018.

		January 1, 2018				December 31, 2018
Fair value of pension plan assets			$5150000				$5550000
Projected benefit obligation			5950000				6430000
Accumulated benefit obligation			1075000				1315000
Accumulated OCI – (Gains / Losses)			0				-165000

The service cost component of pension expense for 2018 is $375000 and the amortization of prior service cost due to an increase in benefits is $71000. The settlement rate is 11% and the expected rate of return is 10%. What is the amount of pension expense for 2018?

Answer 1

Answer
Particulars	Amount ($)
Service Cost	$       375,000
Add: Amortization of prior service	$         71,000
Add: Interest on projected benefit obligation	$       654,500	5950000*11%
Less: Expected return on Plan assets	-$       515,000	5150000*10%
Pension Expense for 2021	$       585,500