Question

Question 2--/20 View Policies Current Attempt in Progress Stellar Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,610 $1,910 Accumulated benefit obligation 1,910 2,590 Projected benefit obligation 2,400 3,120 Plan assets (fair value) 1,680 2,430 Settlement rate and expected rate of return 10 % Pension asset/liability 720 ? Service cost for the year 2020 400 Contributions (funding in 2020) 660 Benefits paid in 202- 180 (a) Compute the actual return on the plan assets in 2020.

Answer 1

$270

Step-by-step explanation:

The computation of the actual return on plant asset is shown below:

Fair value of the Plan assets at Ending of the year $2,430

Less: Fair value of the Plan assets at beginning of the year $1,680

Change in Plan Assets $750

Less Contribution made -$660

Add: Benefits Paid $180

Actual Return $270

We simply applied the above equation to determine the actual return on the plant assets