Assume that Lee Sung, age 30, begins employment with HTSM Corp. on January 1, 2019, at...

    

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Assume that Lee Sung, age 30, begins employment with HTSM Corp. on January 1, 2019, at a starting salary of $37.500. It is expected that Lee will work for HTSM Corp. for 35 years, retiring on December 31, 2053, when Lee is 65 years old. Taking into account estimated compensation increases of approximately 4% per year. Lee's salary at retirement is expected to be $150.000. Further assume that mortality tables indicate the life expectancy of someone age 65 in 2053 is 12 years. The company has the following pension benefit formula: Annual pension benefit on retirement - 2% final salary years of service. A discount rate of 6% is assumed to be the current yield on high-quality debt instruments. Assume it is now 2021, three years after the defined benefit pension plan was initiated. In December 2021, HTSM's actuary provided the company with an actuarial revaluation of the plan. The actuary's assumptions included the following changes: Estimated final salary on retirement Current settlement/discount rate $146,000 7% Calculate the defined benefit obligation at December 31, 2021, and the amount of any actuarial gain or loss. Use a financial calculator of Excel functions for your calculation of the 7% rate. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answers to O decimal places, eg. 5,275.) Pension benefits earned to December 31, 2021 PV of annuity at Dec. 31. 2053 DBO at Dec. 31.2021 Amounts using original assumptions $ Amounts using revised assumptions Based on the revised assumptions at the end of the year, determine what percentage increase or decrease there would be in the DBO for: 1. 2. A 1% increase in the discount rate to 8% A 1% decrease in the discount rate to 6% (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round percentage answers to 0 decimal places, eg 52%) arcentage change 6% discount rate %6 8% discount rate 96 Determine the effect of the actuarial revaluation on the pension plan's surplus or deficit at December 31, 2021, and on pension expense for 2021 and for 2022 assuming ASPE. Pension plan will be put in Pension expense for 2021 will Pension expense for 2022 will position. Assume that Lee Sung had worked for HYSM's subsidiary company for 6 years before working for HTSM. Further assume that, on December 31, 2023. in determining Lee's pension benefits on retirement, HTSM agrees to give Lee credit for the years he worked for the subsidiary company before 2019. Recalculate the past service cost that was incurred by the company in 2023. Use a financial calculator or Excel functions for your calculation of the 7% rate. (Round answer to O decimal places, eg 5.275.) Past service cost incurred $ Assume that Lee Sung, age 30, begins employment with HTSM Corp. on January 1, 2019, at a starting salary of $37.500. It is expected that Lee will work for HTSM Corp. for 35 years, retiring on December 31, 2053, when Lee is 65 years old. Taking into account estimated compensation increases of approximately 4% per year. Lee's salary at retirement is expected to be $150.000. Further assume that mortality tables indicate the life expectancy of someone age 65 in 2053 is 12 years. The company has the following pension benefit formula: Annual pension benefit on retirement - 2% final salary years of service. A discount rate of 6% is assumed to be the current yield on high-quality debt instruments. Assume it is now 2021, three years after the defined benefit pension plan was initiated. In December 2021, HTSM's actuary provided the company with an actuarial revaluation of the plan. The actuary's assumptions included the following changes: Estimated final salary on retirement Current settlement/discount rate $146,000 7% Calculate the defined benefit obligation at December 31, 2021, and the amount of any actuarial gain or loss. Use a financial calculator of Excel functions for your calculation of the 7% rate. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answers to O decimal places, eg. 5,275.) Pension benefits earned to December 31, 2021 PV of annuity at Dec. 31. 2053 DBO at Dec. 31.2021 Amounts using original assumptions $ Amounts using revised assumptions Based on the revised assumptions at the end of the year, determine what percentage increase or decrease there would be in the DBO for: 1. 2. A 1% increase in the discount rate to 8% A 1% decrease in the discount rate to 6% (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round percentage answers to 0 decimal places, eg 52%) arcentage change 6% discount rate %6 8% discount rate 96 Determine the effect of the actuarial revaluation on the pension plan's surplus or deficit at December 31, 2021, and on pension expense for 2021 and for 2022 assuming ASPE. Pension plan will be put in Pension expense for 2021 will Pension expense for 2022 will position. Assume that Lee Sung had worked for HYSM's subsidiary company for 6 years before working for HTSM. Further assume that, on December 31, 2023. in determining Lee's pension benefits on retirement, HTSM agrees to give Lee credit for the years he worked for the subsidiary company before 2019. Recalculate the past service cost that was incurred by the company in 2023. Use a financial calculator or Excel functions for your calculation of the 7% rate. (Round answer to O decimal places, eg 5.275.) Past service cost incurred $

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