Question

Check my work 2 Mary Abbott is a long-time employee of Love Enterprises, a manufacturer and distributor of farm implements. Abbott plans to retire on her 65th birthday, five years from January 1, 2017. Her salary at January 1, 2017 is $48,000 per year, and her projected salary for her last year of employment is $60,000. 25 points Love Enterprises sponsors a defined benefit pension plan. It provides for an annual pension benefit equal to 60% of the employee's annual salary at retirement. Payments commence one year after the anniversary date of his or her retirement. The discount and earnings rate on plan assets is 8%. The average life expectancy for employees is 80. Using (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) еВook Required: 1. Compute the PBO related to Abbott's pension benefits as of January 1, 2017. 2. Compute the ABO for the year ended December 31, 2017 Print (For all requirements, round your final answers to the nearest whole dollar amount.) 246,513 167,772 1. Pension benefit obligation 2 Accumulated Benefit Obligation $

Answer 1

Ansewer e- Retiroyent Benefit plam :- It refer to the plans under which the amount Payable to the Employees of the organization in lieu of Sewices rendered by theey is paid to the Employees ou a later date that occure after the completion of Sewis . These plaus also include scheeyer like stock options, Pension schemes Etc. %. It is given that M is Employee of a company and has annual salay of $48,000 & Projected salary at the time of retirement is $60,000 a company provides retirement benefite of 607. of Expected Salary and discount rate is sy. Prepare a schedule to compute the projected benefit obligation on Jan 01, 2017

Particulars Amount Ź 3). Benefits tied to Expected salary at retireyent (607.x $60,000) = 6000x607. - 36000 5) PVOA of Expected benefits as of 01 Jan 2017 (date of retirement). 67. PVOA for 15 pecíode @ 84 X436,000 (8. = 8.55948x36,000 308141-28 77. 87. Projected benefit obligation on 1 Jan 2017 (date plau adopted] a). PV of single Quomut for 5 pecods@8% = 30814170-68058 209714 Hence, Projected benifit obligation on JAN 01, 2017 is/209714

27. It is given that M is Employee of a company å has annual salary of $ 48,000 & projected salary at the tinge of retirement is $60,000 . he company provides retirement benefits of 60% of Expected Salay & discount rate is 8). . Particulars Amount Benefits tied to current salary (60% x $40,000) $ 28,800 ProA of Expected benefits as of OI JAN 2017 (date of retirement) Prom for 15 Periode @ 84 x $36,000 $246,513 (8-55948 * $ 28,000) Accumulated Projected benefit obligation on ! JAN 2017 (date play adopted). PV of single amount for 5 Periods @ 84. $167,772 (0.68058 x 24.66813) Hence, accumulated projected benefit obligation for 2017 is $167772