1. Pension Plans

Aylmer has two pension plans for employees:

Defined Contribution Plan: For this plan, payments are made to the plan in January for the prior year. Aylmer contributes to this plan, on behalf of the qualified employees. The employees do not contribute. A payment will be made in January Y7 for all of the Y6 defined contribution pension related expenses. Remittances are only required to be made annually as is the corresponding accrual. The entry for accruing the pension expense for Y6 is to be made in December Y6.

In the Excel spreadsheet, see the tab labelled Defined Contribution Plan for calculations.

Defined Benefit Plan: For this plan, NOTE for Y6, the payment and expense have not been recorded on the trial balance.

In the Excel spreadsheet, see the tab labelled Defined Benefit Plan for calculations and requirements for reconciling the pension amounts.

Employees participating in the Defined-Contribution Plan:
			% of salary contributed
		Annual Salary	on behalf of employees	Expense
Brian Dennis	President	$ 163,500.00	8.00%
Jane Ferris	Controller	$ 125,900.00	7.00%
Lin Wang	Sales	$ 75,000.00	7.00%
Hannah Carter	Sales	$ 75,000.00	6.00%
Jessica Lampman	Supervisor	$ 73,200.00	5.00%
Larry Jones	Supervisor	$ 73,200.00	6.00%
Amy Fanshawe-Grad	Accountant	$ 56,500.00	0.00%
Note - employees do not contribute, there is no deduction from their pay cheques.

For the defined benefit plan - assume the following:
Past service cost (end of year adjustment)	36,900
Fair Value of Plan assets, beg of year	106,500
DBO, beginning of year	115,600
Current Service cost	-
Interest Rate on DBO and Plan Assets	8%
Actual Earnings on Plan Assets	8,520
Employer Contribution for the year	12,850
Benefits Paid to Retirees	-
Required:
a) calculate the plan assets at the end of the year
b) calculate the DBO at the end of the year
c) calculate the funded status at the end of the year
d) calculate the pension expense for the year.
NOTE - prepare the pension worksheet for grading purposes.
Pension Worksheet