1.

Colorado Rockies' defined benefit pension plan specifies annual retirement benefits equal to: 1.6% service years final year's salary, payable at the end of each year. Juliette Sam was hired by Rockies at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Sam's salary is $90,000 at the end of 2018 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%.

Required:

1) What is the company's projected benefit obligation at the beginning of 2018 (after 14 years' service) with respect to Sam?

2) What is the company's service cost for 2018 with respect to Sam.

3) What is the company's interest cost for 2018 with respect to Sam?

4) Combine your answers to requirements 1, 2 and 3 to determine the company's projected benefit obligation at the end of 2018 (after 15 years' service) with respect to Sam.

2.

Oprah Productions has a defined benefit pension plan. On December 31, 2018 (the end of Oprah's fiscal year), the following pension-related data were available:

Projected Benefit Obligation ($ in millions Balance, January 1, 2018 $240 Service cost 41 Interest cost, discount rate, 5% 12 Gain due to changes in actuarial assumptions in 2018 (5) Pension benefits paid (20 Balance, December 31, 2018 $268 Plan Assets Balance, January 1, 2018 $250 Actual return on plan assets 20 Expected return on plan assets, $22.5) Cash contributions 35 Pension benefits paid (20 Balance, December 31, 2018 $285 January 1, 2018, balances: Prior service cost (amortization $4 per year) $24 Net gain (any amortization over 15 years) 40