8 Consider the following 1 Present value of vested benefits at present pay levels 2 II. Present value of nonvested benefits at present pay levels 3. III. Present value of additional benefits related to projected pay increases. Which of the above constitutes the projected benefit obligation? a. Ill only b. IL C. I, II, III. d. ll only 9. The PBO is increased by: a. An increase in the average life expectancy of employees. b. Amortization of prior service cost. C. An increase in the actuary's assumed discount rate. d. A return on plan assets that is lower than expected. 10. An underfunded pension plan means that the a. PBO is less than plan assets. b. PBO exceeds plan assets. C. ABO is less than plan assets. d. ABO exceeds plan assets. 11. An overfunded pension plan means that the: a. PBO is less than plan assets. b. PBO exceeds plan assets. C. ABO is less than plan assets. d. ABO exceeds plan assets. 12. The net pension liability (PBO minus plan assets) is decreased by: a. Service cost b. Expected return on plan assets. c. Amortization of net gain-AOCI. d. Prior service cost. 13. Service cost with regard to pension plans: a. increases pension expense and reduces the return on plan assets. b. increases the projected benefit obligation and increases pension expense. . increases the projected benefit obligation and reduces plan assets. d. increases pension expense and reduces plan assets