The trustee of General Appliance Co.'s defined benefit pension plan has determined it is in the best interest of the trust to offer a settlement to 10% of its retirees. The total cash paid out is $700,000 and the DBO is decreased by $1,100,000 because of the settlement. Which of the following statements regarding accounting for the settlement is true? 

A. The settlement increases plan assets. 

B. There is a gain on the settlement. 

C. There is a loss on the settlement.

 D. The settlement does not affect the balance of the DBO.