Final answer:
To calculate the service cost to be included in Oregon's 2024 postretirement benefit expense for Ralph Young, you need to consider factors such as eligibility criteria, benefits, years of service, salary, discount rate, and whether the plan is funded or unfunded. The service cost is calculated by estimating the present value of the expected future pensions for the employee. The final amount will vary depending on specific salary and benefit information.
Step-by-step explanation:
To calculate the service cost to be included in Oregon's 2024 postretirement benefit expense for Ralph Young, we need to consider the eligibility criteria and benefits provided by the company's retirement plan, the discount rate, and whether the plan is funded or unfunded.
The service cost is calculated by estimating the present value of the expected future pensions for an employee. It takes into account factors such as the employee's age at retirement, years of service, and salary. In this case, since Ralph Young was hired in 1988 and is expected to retire at the end of 2026, his years of service would be 38.
Since the plan is unfunded, we'll need to discount the expected future pensions using a discount rate of 5%. The discount rate represents the return the company could expect to earn if it invested the money instead of paying it out as pensions.
Using these inputs, we can calculate the service cost by multiplying Ralph Young's final average salary by a pension factor based on his years of service and age at retirement. We then discount this amount using the discount rate to determine the present value.
It's important to note that without specific salary and benefit information, it's not possible to provide an exact amount for the service cost. However, the steps described above outline the general process for calculating the service cost in Oregon's 2024 postretirement benefit expense.