Indicate by letter whether each of the events listed below increases (I). decreases (D), or has no effect (N) on an employer's projected benefit obligation. Events 1. Interest cost. 2. Amortization of prior service cost. 3. A decrease in the average life expectancy of employees. 4. An increase in the average life expectancy of employees. 5. A plan amendment that increases benefits is made retroactive to prior years. 6. An increase in the actuary's assumed discount rate. 7. Cash contributions to the pension fund by the employer. 8. Benefits are paid to retired employees. 9. Service cost. 10. Return on plan assets during the year are lower than expected. 11. Return on plan assets during the year are higher than expected.
Indicate by letter whether each of the events listed below increases (I). decreases (D), or has no effect (N) on an employer's projected benefit obligation. Events 1. Interest cost. 2. Amortization of prior service cost. 3. A decrease in the average life expectancy of employees. 4. An increase in the average life expectancy of employees. 5. A plan amendment that increases benefits is made retroactive to prior years. 6. An increase in the actuary's assumed discount rate. 7. Cash contributions to the pension fund by the employer. 8. Benefits are paid to retired employees. 9. Service cost. 10. Return on plan assets during the year are lower than expected. 11. Return on plan assets during the year are higher than expected.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Indicate by letter whether each of the events listed below increases (I). decreases (D), or has no effect (N) on an employer's projected
benefit obligation.
Events
1. Interest cost.
2. Amortization of prior service cost.
3. A decrease in the average life expectancy of employees.
4. An increase in the average life expectancy of employees.
5. A plan amendment that increases benefits is made retroactive to prior years.
6. An increase in the actuary's assumed discount rate.
7. Cash contributions to the pension fund by the employer.
8. Benefits are paid to retired employees.
9. Service cost.
10. Return on plan assets during the year are lower than expected.
11. Return on plan assets during the year are higher than expected.
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