Question 5 a) Fern plc started a new defined benefit plan for its employees on 1 January 2020. On this date the fair value of the pension plan assets was 6,200,000 and the present value of the pension plan liabilities was 7,300,000. The current service cost for 2020 was estimated as 360,000. During 2020, the pension plan paid 290,000 benefits to its retired members and Fern plc paid 1,200,000 in contributions to the pension plan. On the reporting date, 31 December 2020, the fair value of the pension plan assets was measured as 7,500,000 and the pension plan liabilities were valued at 7,000,000. The discount rate applied to the obligation and expected return on the assets of the pension plan was determined as 4%. Required: Show how the pension plan will affect the financial statements of Fern plc prepared on 31 December 2020 in accordance with IAS 19 Employee Benefits. (13 marks) b) Many companies have closed their defined benefit pension plans to new entrants, and instead they are offering defined contribution pension plans to new employees. Required: i) Compare and contrast defined benefit and defined contribution pension plans. (5 marks) ii) Explain why defined benefit pension plans have become less attractive for employers in recent years, with reference to three key factors contributing to the increased costs to employers. (5 marks). (Total: 23 marks)