PBO Calculation and Prior Service Cost Frank Lloyd a senior executive at Equity Solutions LLP was hired at the end of 2007. His defined benefit plan formula at the time promised the following: Annual payment =2%x final annual salary number of years of service Frank the only employee in the plan is expected to retire after 35 years of working at Equity Solutions and expected to have a retirement period of 20 years. At the end of 2022, his salary is $100,000 and expected to be $150,000 at retirement. The actuary uses an interest rate of 5% for the pension obligation. The payments in retirement occur at the beginning of each year. REQUIRED: 1. Calculate the PBO related to Frank Lloyd's retirement obligation at the end of 2022. 2. Assume that on January 1, 2023, that Equity Solutions LLP amended the plan to 2.5% and was applied to prior service years. How much prior service cost will arise because of the plan amendment