Judgment Case 17-3 Barlow's wife: relationship mong pensionlements LO17-82 LGD Consulting is a medium-sized provider of environmental engineering services. The corporation sponsors a noncontributory, defined benefit pension plan. Alan Barlow, a new employee and participant in the pension plan, obtained a copy of the 2018 financial statements, partly to obtain additional information about his new employer's obligation under the plan. In part, the pension disclosure note reads as follows: Page 1029 Note 8: Retirement Benefits The Company has a defined benefit pension plan covering substantially all of its employees. The benefits are based on years of service and the employee's compensation during the last two years of employment. The company's funding policy is consistent with the funding requirements of federal law and regulations. Generally, pension costs accrued are funded. Plan assets consist primarily of stocks, bonds, commingled trust funds, and cash. The change in projected benefit obligation for the plan years ended December 31, 2018, and December 31, 2017 S in thousands) Projected benefit obligation at beginning of year Service cost Interest cost Actuarial (gain) loss Benefits paid Projected benefit obligation at end of year 2018 2017 $3,715 94 284 23) (324)(284) $3,786 $3,786 287 302 $4,154 The weighted average discount rate and rate of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligations in the above table were 70% and 4.3%, respectively, at December 31, 2018, and 775% and 2017 and 4-7%, respectively, at December 31, 2017 The expected long-term rate of return on assets was 10.0% at December 31, 2018