Comprehensive Computation of Pension Cost Components
The actuaries for Interconnect Cable Company provided its accountants with the following information related to the company’s pension plan:
|
|
(in thousands) |
|
December 31, 2007: |
|
|
Increase in PBO arising from plan’s amendment |
$ 684 |
|
January 1, 2008: |
|
|
PBO |
$2,700 |
|
ABO |
$2,420 |
|
Fair value of the pension fund |
$1,860 |
|
Market related value of the pension fund (5 year weighted average) |
$1,600 |
|
Accrued pension cost |
$ 226 |
|
Settlement discount rate |
10% |
|
Average service life for amortization of gain and prior service costs |
14 years |
|
Unamortized pension gain—prior year |
$ 70 |
|
Expected rate of return |
9% |
|
For Year 2008: |
|
|
Benefit payments to retirees |
$ 173 |
|
Contributions to pension plan |
290 |
|
December 31, 2008: |
|
|
PBO |
$2,917 |
|
Fair value of pension plan assets |
2,137 |
Instructions: Based on the data provided, prepare a pension work sheet for Interconnect Cable Company for 2008. The 5 year weighted average value of plan assets is used in computing the expected return.