QUESTION FOUR Monovision Plc operates a defined benefit plan for its all-eligible employees, conditioned on employees working for the company for a minimum period of ten (10) years continuously. From estimates prepared and presented by the companys Pension Advisors in December last year, it is believed that the present value of the future benefit obligations and fair value of its plan assets on 1 January 20X1 were 220 million and 300 million respectively. Figures extracted from the companys pension account indicate that the pension plan received contributions of 14 million and paid pensions to former employees of 20 million during the year. Extracts from the most recent actuarys report presented to the company by the Pension Advisors indicate the following:

Present value of pension plan obligation at 31 December 20X1 116m Fair value of plan assets at 31 December 20X1 140m Present cost of pensions earned in the period 22m Yield on high quality corporate bonds at 1 January 20X1 10%

On 1 January 20X1, upon the advice from its Pension Advisors the company changed the rules of its pension plan. The Pension Advisors recommend that the new rules would improve both sustainability and plan benefits for all eligible employees of the company. Monovision has accepted all the recommendations and the actuary has advised that this will cost 10 million.

REQUIRED: You are required to assume contributions and benefits paid on 31 December. Prepare extracts on the following for the year ended 31 December 20X1:

(b) Statement of financial position (15 marks)