Final answer:
The amendment will result in a retroactive benefit increase for the employees in the Soloman Company pension plan, as it increases the pension benefit obligation percentage from 2.0% to 2.2%.
Step-by-step explanation:
On January 1, 2019, Soloman Company changes the factor in the benefit formula from 0.02 to 0.022, which is retroactive to the adoption of the plan. This amendment results in an increased pension benefit obligation because participants will receive higher benefits due to the increased factor. The change in the benefit formula signifies that for every year of service, the benefit will now be calculated at 2.2% (up from 2%) of their salary, which in turn, increases the present value of future pension benefits that the company is obligated to pay. This is an example of a pension plan amendment that leads to a retroactive benefit increase for employees.