Jon Plc runs a defined contribution pension plan for all its employees, except its chief executive officer (CEO). For the CEO, Jon offers a defined benefit pension scheme. Under this plan the CEO's annual pension is based on 3% of his final salary for every year worked at Jon. In 2014, current total salary for the CEO is $100,000. It is expected to grow 4% each year, until retirement at the end of year 2019. The CEO has worked seven years as of 31.12.2014. Assume life expectancy of 20 years from retirement on 31.12.2019. To meet its future pension obligation, Jon has invested in a variety of shares and bonds. As of 31.12.2014, the market value of this investment is $220,000. Assume that Jon uses the yield on an AA-rated bond, which is 5%. On 31.12.2013 Jon reported pension liability as follows: Projected benefit obligation (PBO) $203,657 Plan assets 175,000 Funded status 28,657 Q 3.1 Calculate the funded status of this pension arrangement as at 31.12.2014. Q 3.2 Calculate the current service cost. (Hint: you would need to use the formula for an annuity.) Q 3.3 At the end of 2014 Jon contributed an additional 20,000 to the plan. (Assume that this contribution is already included in the plan assets market value of (220,000 at year end). Calculate the net pension expense for 2014. How much is recognised in OCI? Q 3.4 How would your answer to Part 3 change if Jon made the investment of 20,000 at the beginning of the year