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

b. What payments did retirees receive during fiscal 2018 from the pension plans? What is the source of funds to make payments to retirees?

c. Show the computation of Verizons 2018 funded status for the pension plans.

d. What expense does Verizons income statement report for its pension plans?

e. Why does Verizon distinguish between the Service cost for Cost of services and for Selling, general and administrative expense?

f. Consider the two pensionrelated assumptions above. Indicate whether the 2018 assumptions will increase, decrease, or have no effect on each of the following three pension plan elements relative to the assumption in 2017: PBO; Pension Plan Assets; and 2018 Pension Expense.

December 31, 2018 (\$ millions) Pension Change in Benefit Obligations Beginning of year. $21,531 Service cost 284 Interest cost Plan amendments. 690 230 Actuarial (gain) loss, net. (1,418) Benefits paid. Curtailment and termination benefits Settlements paid. End of year. $19,567 Change in Plan Assets Beginning of year . . . . Actual return on plan assets. (494) Company contributions. 1,066 Benefits paid. ... (1,475) Settlements paid. (456) End of year $17,816 Verizon discloses the following assumptions related to its pension plans