Refer
to the information for Cotter Corp. in BE19–3, and provide a continuity
schedule for the plan assets for the year. Is the plan overfunded or
underfunded?
In
BE Cotter Corp. reports the following information (in hundreds of thousands of
dollars) to you about its defined benefit pension plan for 2011:
Actual
return on plan assets ……………………………… 11
Current
service cost …………………………………….. 21
Benefits
paid to retirees ………………………………… 8
Interest
cost …………………………………………….. 9
Contributions
from employer …………………………… 20
Opening
balance, accrued benefit obligation (ABO) …… 92
Cost
of plan amendment in year ………………………… 13
Opening
balance, fund assets …………………………… 100
Provide
a continuity schedule for the ABO for the year.
Fund assets,
opening balance $100
Actual return on
assets 11
Contributions from
employer 20
Benefits paid to retirees
(8 )
Fund assets, ending balance $123
Accrued benefit obligation (BE 19-3) $(127 )
Plan assets at fair value
123
Plan’s funded status $ (4 )
Since the accrued benefit obligation exceeds the plan
assets, the plan is underfunded.
