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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:
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- Spring '11
- mike
- Accounting, Life annuity, $3,061.5
-
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