Melur Pension Plan B Under the terms of the plan, Melur does not guarantee any return on the contributions paid into the fund. The company's legal and constructive obligation is limited to the amount that is contributed to the fund. The following details relate to this scheme: RM million Fair value of plan assets at 31 October 2019 21 Contributions paid by company for year to 31 October 2019 10 Contributions paid by employees for year to 31 October 2019 10 The interest rate on high quality corporate bonds for the two plans are: 1 November 2018 31 October 2019 5% 6% The company would like advice on how to treat the two pension plans, for the year ended 31 October 2019, together with an explanation of the differences between a defined contribution plan and a defined benefit plan. Required: Draft a report suitable for presentation to the directors of Melur which: a) Discusses the nature of and differences between a defined contribution plan and a defined benefit plan with specific reference to the company's two schemes. (7 Marks) b) Shows the accounting treatment for the two Melur pension plans for the year ended 31 October 2019 under MRS 119 Employee benefits. (8 Marks)Melur, a public limited company, is a leading support services company which focuses on the building industry. The company would like advice on how to treat certain items under MFRS 119 Employee benefits. The company operates the Melur Pension Plan B which commenced on 1 November 2018 and the Melur Pension Plan A, which was closed to new entrants from 31 October 2018, but which was open to future service accrual for the employees already in the scheme. The assets of the schemes are held separately from those of the company in funds under the control of trustees. The following information relates to the two schemes. Melur Pension Plan A The terms of the plan are as follows. 1. Employees contribute 6% of their salaries to the plan. 2. Melur contributes, currently, the same amount to the plan for the benefit of the employees. 3. On retirement, employees are guaranteed a pension which is based upon the number of years service with the company and their final salary. The following details relate to the plan in the year to 31 October 2019: RM million Present value of obligation at 1 November 2018 200 Present value of obligation at 31 October 2019 240 Fair value of plan assets at 1 November 2018 190 Fair value of plan assets at 31 October 2019 225 Current service cost 20 Pension benefits paid 19 Total contributions paid to the scheme for year to 31 October 2019 17 Remeasurement gains and losses are recognised in accordance with MFRS 119