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The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions):
Information Provided by Pension Plan Actuary:
- Projected benefit obligation as of December 31, 2023 = $3,950.
- Prior service cost from plan amendment on January 2, 2024 = $850 (straight-line amortization for 10-year average remaining service period).
- Service cost for 2024 = $690.
- Service cost for 2025 = $740.
- Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%.
- Payments to retirees in 2024 = $550.
- Payments to retirees in 2025 = $620.
- No changes in actuarial assumptions or estimates.
- Net gainAOCI on January 1, 2024 = $465.
- Net gains and losses are amortized for 10 years in 2024 and 2025.
Information Provided by Pension Fund Trustee:
- Plan asset balance at fair value on January 1, 2024 = $2,800.
- 2024 contributions = $710.
- 2025 contributions = $760.
- Expected long-term rate of return on plan assets = 12%.
- 2024 actual return on plan assets = $260.
- 2025 actual return on plan assets = $310.
Required:
Calculate pension expense for 2024 and 2025.
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