Analyzing and Interpreting Pension Disclosures General Mills, Inc. reports the f
ID: 2564309 • Letter: A
Question
Analyzing and Interpreting Pension Disclosures General Mills, Inc. reports the following pension footnote in its 10-K report. Defined Benefit Pension Plans ($ millions) Fiscal Year 2016 Change in Plan Assets Fair value at beginning of year Actual return on assets Employer contributions Plan participant contributions Benefit payments Foreign currency $5,758.5 36.3 23.7 5.7 (277.5) (6.8) $5,539.9 Fair value at end of year Change in Projected Benefit Obligation $6,252.1 134.6 267.8 0.9 Benefit obligation at beginning of year Service cost Interest cost Plan amendment Curtailment/other Plan participant contributions Medicare Part D reimbursements Benefits payments Foreign currency 5.7 65.2 (278.0) (6.9) $6,448.5 Projected benefit obligation at end of year Estimated benefit payments...are expected to be paid from fiscal 2017-2026 as follows: Defined Benefit $ millions 2017 2018 2019 2020 2021 2022-2026 Pension Plans $277.7 287.9 297.1 306.8 316.4 1,731.5Explanation / Answer
b. Total amount paid to retirees during the fiscal 2016= Benefit payments= $ 277.5 millions Source of funds to make these payments to retirees d. Pension assets (In the form of investments & interest earned thereon,& employer contributions to the fund created for the purpose c. Funded status for the company's pension plan(in millions)= Fair value of plan assets Projected defined benefit obligation 5539.9-6448.5= -908.6 Net pension liablity (under-funded)