General Mills reports the following pension footnote in its \(10-\mathrm{K}\) report.

Estimated benefit payments, which reflect expected future service, as appropriate, are expected to be paid from fiscal 2009-2018 as follows:

a. Describe what is meant by service cost and interest cost.

b. What is the total amount paid to retirees during fiscal 2008? What is the source of funds to make these payments to retirees?

c. Compute the 2008 funded status for the company's pension plan.

d. What are actuarial gains and losses? What are the plan amendment adjustments, and how do they differ from the actuarial gains and losses?

e. General Mills projects payments to retirees of over \(\$ 175\) million per year. How is the company able to contribute only \(\$ 14.2\) million to its pension plan?

f. What effect would a substantial decline in the financial markets have on General Mills contribution to its pension plans?

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Defined Benefit Pension Plans (In millions) Change in Plan Assets Fair value at beginning of year. Actual return on assets.... Employer contributions.. Plan participant contributions. Divestitures/acquisitions. Benefit payments... 2008 2007 $4,097.8 181.1 $3,620.3 625.9 14.2 10.6 3.6 2.8 - Fair value at end of year.. (168.0) $4,128.7 2.4 (164.2) $4,097.8 Change in Projected Benefit Obligation Benefit obligation at beginning of year. $3.257.5 $2.916.4 Service cost 80.1 73.1 Interest cost. 196.7 185.6 Plan amendment. Curtailment/other Plan participant contributions. 1.9 0.2 (0.6) (0.4) 3.6 Actuarial loss (gain).. Benefits payments. (147.1) 2.8 244.0 (168.0) (164.2) Projected benefit obligation at end of year $3,224.1 $3,257.5