Determine the amounts of nonoperating assets and financial claims related to the
ID: 2452840 • Letter: D
Question
Determine the amounts of nonoperating assets and financial claims related to the retiree health and life benefits plans and pension plans that would be included in a valuation of GE.
Accumulated Postretirement Benefit Obligation (APBO)(in milions)
2000
1999
Balance at January 1
Service cost for benefits earned
Interest cost on benefit obligation
Plan amendments
Actuarial loss /gain
Benefits paid
Other
Balance at December 31
$ 4,926
165
402
948
534
(553)
-
$ 6,422
$ 5,007
107
323
-
(62)
(475)
26
$ 4,926
Fair Value of Assets (in millions )
2000
1999
Balance at January 1
Actual return on plan assets
Employer contributions
Benefit paid
Balance at December 31
$2,369
(85)
300
(553)
$ 2,031
$ 2,121
355
368
(475)
$ 2,369
Retire Benefit Liability /Asset December 31
2000
1999
Accumulated postretirement obligation
Deduct unrecognized balances
Prior service cost
Net actuarial loss
Fair value of plan assets
Net liability
$ 6,422
(999)
(818)
(2,031)
$ 2,574
$ 4,926
(100)
(61)
(2,369)
$ 2,396
Actuarial Assumption December 31
2000 1999
1998
Discount rate
Compensation increases
Health care cost trend (a)
Return on assets for the year
7.5% 7.7%
5.0 5.0
10.0 9.0
9.5 9.5
6.75%
5.0
7.8
9.5
Accumulated Postretirement Benefit Obligation (APBO)(in milions)
2000
1999
Balance at January 1
Service cost for benefits earned
Interest cost on benefit obligation
Plan amendments
Actuarial loss /gain
Benefits paid
Other
Balance at December 31
$ 4,926
165
402
948
534
(553)
-
$ 6,422
$ 5,007
107
323
-
(62)
(475)
26
$ 4,926
Fair Value of Assets (in millions )
2000
1999
Balance at January 1
Actual return on plan assets
Employer contributions
Benefit paid
Balance at December 31
$2,369
(85)
300
(553)
$ 2,031
$ 2,121
355
368
(475)
$ 2,369
Retire Benefit Liability /Asset December 31
2000
1999
Accumulated postretirement obligation
Deduct unrecognized balances
Prior service cost
Net actuarial loss
Fair value of plan assets
Net liability
$ 6,422
(999)
(818)
(2,031)
$ 2,574
$ 4,926
(100)
(61)
(2,369)
$ 2,396
Actuarial Assumption December 31
2000 1999
1998
Discount rate
Compensation increases
Health care cost trend (a)
Return on assets for the year
7.5% 7.7%
5.0 5.0
10.0 9.0
9.5 9.5
6.75%
5.0
7.8
9.5
Explanation / Answer
Determine the amounts of nonoperating assets and financial claims related to the
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