During 2016, XYZ Company's actuaries decreased the discount rate used to calculate pension obligation from 4.3% to 3.8%

The effect on the company's pension expense for the year and pension obligation balance at year end is:

1) Inerease pension expense, decrease pension obligation

2) Decrease pension expense, decrease pension obligation

3) Inerease pension expense, increase pension obligation

4) Decrease pension expense, increase pension obligation