The actuary for the pension plan of Gustafson Inc. calculated the following net

Question

The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.

Incurred during the Year

(Gain) or Loss

Other information about the company’s pension obligation and plan assets is as follows.

As of January 1,

Projected Benefit
Obligation

Plan Assets
(market-related asset value)

Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2014. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2014, 2015, 2016, and 2017. Apply the “corridor” approach in determining the amount to be amortized each year. (Round answers to 0 decimal places, e.g. 2,500.)

Incurred during the Year

(Gain) or Loss

2014 $300,000 2015 480,000 2016 (210,000) 2017 (290,000)

Explanation / Answer

Ans 1

Workings

Year Minimum Amortisation 2014                                           -   2015                           23,428.57 2016                           23,428.57 2017                           23,428.57

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