Notes_on_computations - FSA3607 Accounting Specifics For...

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FSA3607 – Accounting Specifics For Postretirement Benefits Slide 26
NOTES ON COMPUTATIONS
1. Pension per year, 962 $ 5
52
000 , 10 $
= ×
one week’s compensation at the time of retirement multiply by the number of years worked under the plan.
2. The PV of the pension @ December 31, 2025, date of retirement is:
753 , 6 $
07 . 0
) 07 . 0 1 ( 1
962 $
10
=








+ -
×
-
.
Ten years life expectancy, discount rate 7%.
3. The PV of the pension @ December 31, 2005, date of the balance sheet (today) is:
745 , 1 $ ) 07 . 1 ( 753 , 6 $
20
= ×
-
4. The projected salary and the date of retirement is:
911 , 21 $ ) 04 . 1 ( 000 , 10 $
20
= ×
, if we suppose a 4% increase in salary per year.
5. The projected pension per year, one week compensation, 2005 formula:
107 , 2 $ 5
52
911 , 21 $
= ×
6. The PV of the corresponding projected pension @ December 31, 2025, date of retirement is:
798 , 14 $
07 . 0
) 07 . 0 1
107 , 2 $
10
=








+ -
×
-
7. The PV of the corresponding projected pension @ December 31, 2005, date of the balance sheet (today) is:
824 , 3 $ ) 07 . 1 ( 798 , 17 $
20
= ×
-
8. Same as 7. above, but computed 1 year later.
091 , 4 $ ) 07 . 1 ( 824 , 3 $
1
= ×
9. Pension per year in 2006, based on a six year-service:
528 , 2 $ 6
52
911 , 21 $
= ×
10. Corresponding PV: 757 , 17 $
07 . 0
) 07 . 0 1 ( 1
528 , 2 $
10
=








+ -
×
-
11. Corresponding PBO end of 2006: