Assume that a Vikings, Inc. establishes a Defined Benefit pension planThng, The assumed in the coming year of $50,000 and is expected discount rate is 6 percent, and the assumed annual compensation increase simplicity, assume that there are no changes in actuarial assumptions awarded on the first day of the service year, and no additional adjustments are possibility that the employee may leave the company at an earlier date. to work five more years before retiring. The assumed is 4.75 percent. For all compensation increases are made to reflect the In this Case, the upon retirement. employee gets credit for prior years of service, and the benefit is paid as a lump sum plan will pay a lump sum pension benefit equal to 1.5 percent of the employee's final salary for er of service beyond the date of establishment, In addition, at the time the pension plan is established, the employee is given credit for 10 years of prior service with immediate vesting Current Salary Years until employee retires Prior years service credit Annual compensation increase Discount rate $50,000 10 4.76% 6.00% Required Determine Salary for each year based on increase in salary Amount of Prior Years service earned by employee, if any Annual Unit Credit earned by employee Fill in the table below for each year: Case 2 5 Year Estimated Salary $50,00000 Benefits attributed to: Prior years service Current year's service Total benefits earned Opening ObligationS_ Interest cost Current Service Cost Closing Obligation S