Hass Foods Inc. sponsors a post-retirement medical and dental benefit plan for its employees. The company adopted the provisions of IAS 19 beginning January 1, 2014. The following balances relate to this plan on January 1, 2014:
Plan assets................................................$ 2,780,000
Defined post-retirement benefit obligation............3,439,800
Past service costs.................................................-0-
As a result of the plan's operation during 2014, the following additional data were provided by the actuary.
1. The service cost for 2014 was $273,000.
2. The discount rate was 9%.
3. Funding payments in 2014 were $234,000.
4. The actual return on plan assets was $58,500.
5. The benefits paid on behalf of retirees from the plan were $171,600.
6. The average remaining service life to full eligibility was 20 years.
Instructions
(a) Calculate the post-retirement benefit expense for 2014.
(b) Prepare a continuity schedule for the defined post-retirement benefit obligation and for the plan assets from the beginning of the year to the end of 2014.
(c) At December 31, 2014, prepare a schedule reconciling the plan's funded status with the post-retirement amount reported on the statement of financial position.
(d) Explain in what ways, if any, the accounting requirements for this plan are different from the requirements for a defined benefit pension plan.