Question 4 Employee Benefits (15 marks)

ABC Ltd contributes to a defined benefit superannuation plan for its employees. The

following information is available for the plan at 30 June 2020.

Fair value of plan assets (1 July 2019) $11 700 000

Fair value of plan assets (30 June 2020) $12 900 000

Present value of defined benefit obligation (1 July 2019) $12 000 000

Present value of defined benefit obligation (30 June 2020) $13 080 000

Benefits paid by the fund to members during the year $1 100 000

Contributions paid by ABC Ltd to the fund during the year $1 220 000

Current service cost $1 200 000

Rate of return on plan assets for the period 7.0%

Discount rate (1 July 2019) 5.0%

Discount rate (30 June 2020) 6.0%

REQUIRED:

1. Calculate the actuarial gain or loss of the plan assets for the period ended 30 June 2020. Please specify whether it is a gain or loss.
2. Calculate the actuarial gain or loss of defined benefit obligation for the period ended 30 June 2020. Please specify whether it is a gain or loss.
3. Calculate the defined benefit cost or income recognised in other comprehensive income for the period ended 30 June 2020. Please specify whether it is a cost or income?

Present value interest factor of $1 per period at% forn periods, PVIFILD). Period 9% 10% 11% 12% 13% 17% 19% 20% 10.990 0.980 0.971 0.962 0.9520 0.9430.935 0.928 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.8550.847 0.840 0.633 20.980 0.961 0.943 0.925 0.9070.890 0.873 0.8570.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.694 30.971 0.942 0.915 0.8890.864 0.840 0.816 0.794 0.772 0.7510.731 0.712 0.693 0.675 0.658 0.6410.624 0.609 0.593 0.579 40.961 0.924 0.888 0.855 0.823 0.7920.7630.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 50.951 0.906 0.863 0.822 0.784 0.7472 0.713 0.681 0.650 0.6210.593 0.567 0.543 0.519 0.497 0.4760.456 0.437 0.419 0.402 USOH 0.83700.790 0.746 0.705 0.668 0.630 0.596 0.564 0.535 0.507 0.400 0.456 0.432 0.4100.390 0.3700.352 0.336 70.933 0.871 0.8130.7600.7110.665 0.623 0.5830.5470.513 0.482 0.452 0.425 0.400 0.378 0.354 0.333 0.314 0.296 0.279 0.789 0.731 0.677 0.6270.5820.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.3050.285 0.2060.2490.233 90.914 0.837 0.766 0.7030.6450.5920.5440.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 100.905 0.820 0.744 0.6760.614 0.5580.500.40 0.422 0.336 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.1910.176 0.162 110.8960.8040.7220.6500.5850.5270.475 0.429 0.38 0.350 0.317 0.287 0.281 0.237 0.215 0.1950.1780.162 0.148 0.135 120.8870.7880.7010.025 0.557 0.4970.4440.397 0.3660.319 028602570 0.231 0.208 0.187 0.1680.152 0.13700.1240.112 130.87990.7730.8310.801 0.53090.4690.4150.3680.3260.290 0.250 0.2299 0.2040.1820.1630.1450.15090.116 0.1040.095 140870 0.750 0.600.5774 0.505 0.4420388 0.340 0.299 0.2030.232 0.2050.1810.1600.141 0.125 0.111.099 0.08 0.078 150.861 0.743 0.642 0.565 0.481 0.417 0.362 0.3150275 0.239 0.209 0.183 0.1600.140 0.123 0.1080.095 0.084 0.074 0.065 130.8530.7280.6230.5340.4680.3940.3390.292 0.252 0.2180.188 0.163 0.141 0.123 0.1070.093 0.081 0.071 0.062 0.054 1740.844 0.714 0.605 0.513 0.4360.3710.3170.270 0.2310.1980.1700.146 0.125 0.1080.093 0.080 0.069 0.060 0.052 0.0451 0.8380.7000.587 0.4940.476 0.3500.2980.250 0212 0.1800.153 0.13000.1110.095 0.081 0.069 0.059 0.051 0.044 0.030 1970.828056860.57090.475 0.39603310.2770.232 0.1940.1640.138 0.116 0.098 0.070+ 0.060 0.051 0.043 0.037 0.031 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.0510.043 0.037 0.031 0.0261 25 0.780 0.610 0.478 0.375 0.2950.233 0.1840.146 0.116 0.092 0.074 0.0590.047 0.038 0.030 0.024 0.0200.0160.013 0.010 0.552 0.412 0.308 0.231 0.1740.131 0.099 0.075 0.0570.044 0.033 0.026 0.0200.015 0.0120.0090.007 0.005 0.004 350.7080.5000.355 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.0190 0.014 0.0100 0.008 0.006 0.0040.003 0.002 0.002 40 0.872 0.453 0.307 0.208 0.142 0.097 06700.00 0.032 0.022 0.0151 0.0110.008 0.0050.0040.003 0.002 0.001 0.001 0.001 500.008 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.0130.0090.005 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 Present value interest factor of an (ordinary) annuity of $1 per period at i% forn periods, PVIFA(LD). Period 1% 2% 4% 5% 6% 7% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.9260.9174 0.90 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 1.970 1.942 1.913 1.866 1.859 1.833 1.8081.7831.759 1.736 1.713 1.6901.668 1.647 1.626 1.605 1.505 1.566 1.547 1.528 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.5774 2.531 2.487 2.444 2.402 2.3612.322 2.283 2.246 2.210 2.174 2.140 2.106 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.3123.240 3.17 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.79 3.696 3.605 3.517 3.433 3.352 3.274 3.1993.127 3.058 2.991 6 5.795 5.601 5.417 5.242 5.076 4.9174 4.767 4.6234.4864 4.35 4.2314 4.1114 3.9983.8893.784 3.685 3.589 3.498 3.410 3.326 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.2065.033 4.863 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 7.652 7.325 7.020 6.733 3.463 6.210 5.971 5.7475.535 5.338 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4,076 3.954 3.837 9 8.568 8.162 7.786 7.435 7.108 6.802 6.515 6.2474 5.995 5.759 5.5374 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 10 9.4714 8.983 8.530 8.1110 7.722 7.360 7.0246.710 6.418 6.14 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 1110.388 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.494 6.20745.9384 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 12 11.255 10.575 9.954 9.385 8.863 8.384 7.9437.536 7.161 6.814 6.4926.1945.9185.660 5.421 5.197 4.988 4.793 4.611 13.12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.10 6.750 6.424 6.122 5.8425.583 5.342 5.118 4.910 4.715 4.533 14 13.004 12.106 11.296 10.583 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 6.302 6.0025.724 5.4685.2295.008 4.802 4.611 154 13.865 12.849 11.938 11.118 10.30 9.712 9.108 8.5598.0617.60 7.1916.8114 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 16 14.718 13.578 12.561 11.652 10.838 10.106 9.4478.8518.313 7.824 7.379 6.9746.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 174 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.024 7.549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 184 16.398 14.992 | 13.754 12.659 11.690 10.828 10.0599.3728.756 8.20 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 1917.226 15.678 14.32413.134 12.085 | 11.15810.336 9.604 8.950 8.364 7.839 7.3686.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 2018.046 16.3514 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.5147.963 7.4697.025 6.623 6.259 5.929 5.628 5.3535.101 4.870 254 22.023 19.523 17.413 | 15.622 14.094 12.783 11.654 10.67 9.823 9.077 8.422 7.8437.330 6.873 6.464 6.0975.7665.467 5.195 4.948 30 25.80822.396 | 19.600 17.292 | 15.372 13.765 12.409, 11.25 10.274 9.427 8.694 8.0557.496 7.003 6.568 6.177 5.8295.517 5.235 4.979 35 29.409 24.99921.487 18.685 16.374 14.498 12.948 11.65 10.587 9.644 8.855 8.1767.586 7.0706.617 6.215 5.8585.539 5.251 4032.835 27.356 23.115 19.793 17.159 15.046 13.332 11.9210.757 9.778 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 50 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.23 10.967 9.916 9.042 8.304 7.675 7.133 6.6616.246 5.880 5.554 5.262 4.999 Present value interest factor of $1 per period at% forn periods, PVIFILD). Period 9% 10% 11% 12% 13% 17% 19% 20% 10.990 0.980 0.971 0.962 0.9520 0.9430.935 0.928 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.8550.847 0.840 0.633 20.980 0.961 0.943 0.925 0.9070.890 0.873 0.8570.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.694 30.971 0.942 0.915 0.8890.864 0.840 0.816 0.794 0.772 0.7510.731 0.712 0.693 0.675 0.658 0.6410.624 0.609 0.593 0.579 40.961 0.924 0.888 0.855 0.823 0.7920.7630.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 50.951 0.906 0.863 0.822 0.784 0.7472 0.713 0.681 0.650 0.6210.593 0.567 0.543 0.519 0.497 0.4760.456 0.437 0.419 0.402 USOH 0.83700.790 0.746 0.705 0.668 0.630 0.596 0.564 0.535 0.507 0.400 0.456 0.432 0.4100.390 0.3700.352 0.336 70.933 0.871 0.8130.7600.7110.665 0.623 0.5830.5470.513 0.482 0.452 0.425 0.400 0.378 0.354 0.333 0.314 0.296 0.279 0.789 0.731 0.677 0.6270.5820.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.3050.285 0.2060.2490.233 90.914 0.837 0.766 0.7030.6450.5920.5440.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 100.905 0.820 0.744 0.6760.614 0.5580.500.40 0.422 0.336 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.1910.176 0.162 110.8960.8040.7220.6500.5850.5270.475 0.429 0.38 0.350 0.317 0.287 0.281 0.237 0.215 0.1950.1780.162 0.148 0.135 120.8870.7880.7010.025 0.557 0.4970.4440.397 0.3660.319 028602570 0.231 0.208 0.187 0.1680.152 0.13700.1240.112 130.87990.7730.8310.801 0.53090.4690.4150.3680.3260.290 0.250 0.2299 0.2040.1820.1630.1450.15090.116 0.1040.095 140870 0.750 0.600.5774 0.505 0.4420388 0.340 0.299 0.2030.232 0.2050.1810.1600.141 0.125 0.111.099 0.08 0.078 150.861 0.743 0.642 0.565 0.481 0.417 0.362 0.3150275 0.239 0.209 0.183 0.1600.140 0.123 0.1080.095 0.084 0.074 0.065 130.8530.7280.6230.5340.4680.3940.3390.292 0.252 0.2180.188 0.163 0.141 0.123 0.1070.093 0.081 0.071 0.062 0.054 1740.844 0.714 0.605 0.513 0.4360.3710.3170.270 0.2310.1980.1700.146 0.125 0.1080.093 0.080 0.069 0.060 0.052 0.0451 0.8380.7000.587 0.4940.476 0.3500.2980.250 0212 0.1800.153 0.13000.1110.095 0.081 0.069 0.059 0.051 0.044 0.030 1970.828056860.57090.475 0.39603310.2770.232 0.1940.1640.138 0.116 0.098 0.070+ 0.060 0.051 0.043 0.037 0.031 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.0510.043 0.037 0.031 0.0261 25 0.780 0.610 0.478 0.375 0.2950.233 0.1840.146 0.116 0.092 0.074 0.0590.047 0.038 0.030 0.024 0.0200.0160.013 0.010 0.552 0.412 0.308 0.231 0.1740.131 0.099 0.075 0.0570.044 0.033 0.026 0.0200.015 0.0120.0090.007 0.005 0.004 350.7080.5000.355 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.0190 0.014 0.0100 0.008 0.006 0.0040.003 0.002 0.002 40 0.872 0.453 0.307 0.208 0.142 0.097 06700.00 0.032 0.022 0.0151 0.0110.008 0.0050.0040.003 0.002 0.001 0.001 0.001 500.008 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.0130.0090.005 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 Present value interest factor of an (ordinary) annuity of $1 per period at i% forn periods, PVIFA(LD). Period 1% 2% 4% 5% 6% 7% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.9260.9174 0.90 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 1.970 1.942 1.913 1.866 1.859 1.833 1.8081.7831.759 1.736 1.713 1.6901.668 1.647 1.626 1.605 1.505 1.566 1.547 1.528 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.5774 2.531 2.487 2.444 2.402 2.3612.322 2.283 2.246 2.210 2.174 2.140 2.106 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.3123.240 3.17 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.79 3.696 3.605 3.517 3.433 3.352 3.274 3.1993.127 3.058 2.991 6 5.795 5.601 5.417 5.242 5.076 4.9174 4.767 4.6234.4864 4.35 4.2314 4.1114 3.9983.8893.784 3.685 3.589 3.498 3.410 3.326 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.2065.033 4.863 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 7.652 7.325 7.020 6.733 3.463 6.210 5.971 5.7475.535 5.338 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4,076 3.954 3.837 9 8.568 8.162 7.786 7.435 7.108 6.802 6.515 6.2474 5.995 5.759 5.5374 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 10 9.4714 8.983 8.530 8.1110 7.722 7.360 7.0246.710 6.418 6.14 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192 1110.388 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.494 6.20745.9384 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 12 11.255 10.575 9.954 9.385 8.863 8.384 7.9437.536 7.161 6.814 6.4926.1945.9185.660 5.421 5.197 4.988 4.793 4.611 13.12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.10 6.750 6.424 6.122 5.8425.583 5.342 5.118 4.910 4.715 4.533 14 13.004 12.106 11.296 10.583 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 6.302 6.0025.724 5.4685.2295.008 4.802 4.611 154 13.865 12.849 11.938 11.118 10.30 9.712 9.108 8.5598.0617.60 7.1916.8114 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 16 14.718 13.578 12.561 11.652 10.838 10.106 9.4478.8518.313 7.824 7.379 6.9746.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 174 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.024 7.549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 184 16.398 14.992 | 13.754 12.659 11.690 10.828 10.0599.3728.756 8.20 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 1917.226 15.678 14.32413.134 12.085 | 11.15810.336 9.604 8.950 8.364 7.839 7.3686.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 2018.046 16.3514 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.5147.963 7.4697.025 6.623 6.259 5.929 5.628 5.3535.101 4.870 254 22.023 19.523 17.413 | 15.622 14.094 12.783 11.654 10.67 9.823 9.077 8.422 7.8437.330 6.873 6.464 6.0975.7665.467 5.195 4.948 30 25.80822.396 | 19.600 17.292 | 15.372 13.765 12.409, 11.25 10.274 9.427 8.694 8.0557.496 7.003 6.568 6.177 5.8295.517 5.235 4.979 35 29.409 24.99921.487 18.685 16.374 14.498 12.948 11.65 10.587 9.644 8.855 8.1767.586 7.0706.617 6.215 5.8585.539 5.251 4032.835 27.356 23.115 19.793 17.159 15.046 13.332 11.9210.757 9.778 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 50 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.23 10.967 9.916 9.042 8.304 7.675 7.133 6.6616.246 5.880 5.554 5.262 4.999