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Analyzing and Interpreting Pension Disclosures

DowDuPont$$s $10-$K report has the following disclosures related to its retirement plans.

Obligations and Funded Status $($$ millions$)$Current YearChange in projected benefit obligationsBenefit obligations at beginning of year$$57,401$Service cost$651$Interest cost$1,638$Plan participants$$ contributions$29$Actuarial changes in assumptions and experience$(2,832)$Benefits paid$(3,223)$Plan amendments$34$Acquisitions$/$divestitures$/$other$(57)$Effect of foreign exchange rates$(627)$Benefit obligation at end of year$$53,014$Change in plan assetsFair value of plan assets at beginning of year$$43,685$Actual return on plan assets$(1,524)$Employer contributions$2,964$Plan participants$$ contributions$29$Benefits paid$(3,223)$Acquisitions$/$divestitures$/$other$(7)$Effect of foreign exchange rates$(462)$Fair value of plan assets at end of year$$41,462$Funded statusU.S$.$ plan with plan assets$$(6,956)$Non$-$U$.$S$.$ plans with plan assets$(2,751)$All other plans$(1,845)$Funded status at end of year$$(11,552)$

Components of Net Periodic Benefit Cost $($$ millions$)$Current YearNet periodic benefit costService cost$$651$Interest cost$1,638$Expected return on plan assets$(2,846)$Amortization of prior service $($credit$)(24)$Amortization of unrecognized $($gain$)$ loss$649$Curtailment$/$settlement$/$other$(10)$Net periodic benefit costs $-$ Total$$58$

Weighted$-$Average Assumptions used to Determine NetCurrentPriorPeriodic Benefit Cost for Years Ended December $31$ YearYearDiscount rate$3\mathrm{.}80\%3\mathrm{.}26\%$Expected return on plan assets$6\mathrm{.}68\%6\mathrm{.}94\%$Rate of compensation increase$3\mathrm{.}95\%3\mathrm{.}88\%$

Required

part a

part b

part c

part d

part e

part f

part g

a$.$ How much pension expense does DowDuPont report in its current year income statement? Would pension expense have been higher or lower if DowDuPont had not changed the $$Rate of compensation increase$$ during the current period?

$($$ millions$)$Pension expense:

Pension expense would have been Answer $2$higherlower if DowDuPont had not changed the $$Rate of compensation increase$$ during the current period.