Check m Pension data for Millington Enterprises include the following: ($ in mil

Question

Check m Pension data for Millington Enterprises include the following: ($ in millions) Discount rate, 10% Projected benefit obligation, January 1 Projected benefit obligation, December 31 Accumulated benefit obligation, January 1 Accumulated benefit obligation, December 31 Cash contributions to pension fund, December 31 Benefit payments to retirees, December 31 $430 535 370 485 220 68 ces Required Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31 Service costmilion ?Prev 6 of 7 Next > to search

Explanation / Answer

Beginning of year benefit obligation 430
(+) Service cost X
(+) Interest cost 43*
(+) Past service costs 0**
(+) Actuarial loss/(gain) 0
(-) Benefits paid 68
= End of the year benefit obligation. 535

Solving above will give service cost = 535+68-43-430 = $ 130 million

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