A. Pension obligation (liability) Pension obligation (asset) Pension receivable

Question

A. Pension obligation (liability) Pension obligation (asset) Pension receivable (asset) Pension recoverable (obligation) B. $24,970 $10,330 $7,320 $17,650 $732 C. 10% 59% 41% 100% D. Would Would not L podction and fabrication of alumim and aluninum Lucia, Inc., is the wokts leader in the 2011, reports pension oeligations of $17 850 mlion. On the same dale ts pension assts toaied 7,320 mton Requirement Whal is the impact of this deined products The company has had a delined benet pension plan for many years Footnole W of the 10-K for December 31, benelt pension plan on Luciar's balance sheet on Decomber 31, 201 17 Comment on how comfortable employees shodid be that they will receive their full pension benelits Aiooa's balance heet will have ane asset fund on This means thal app of the pension otligations are funded Alcos were to go barknugt, the pesion have enough resources to pay al of the pnsion obigsons

Explanation / Answer

Balance sheet will have a net pension obligation (liability) of $10,330 million, i.e. $17, 650 million of pension obligation less $7,320 million of pension assets (17650 million – 7320 million).

This means approximately 41% (7,320 million x 100 / 17,650) of pension obligations are funded which is represented by the pension assets.

In case the company go bankrupt the pension assets fund would not have enough resources yo pay off the pension obligations.

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