The balance sheet below represents the pension plan of Myers Incorporation ASSETS: ( in millions) Pension fund 720 Future normal costs 600 Unarmortized supplemental liabilities 100 Losses from changes in actuarial assumptions. 150 TOTAL ASSETS: 1660 LIABILITIES: (in millions) Vested accrued benefits. 540 Unvested accrued benefits. 220 Expected future service costs 900 EXPECTED BENEFITS: 1660 Required: a). Explain the meaning of each of the terms highlighted in the balance sheet above b). Calculate: i). Unfunded vested accrued benefits ii). Unfunded accrued benefits C). Suppose normal costs do not change, show how the balance sheet would change if: i). The value of securities in the pension fund falls by $50 million ii). The union negotiation increased pension worth $80 million
The
ASSETS: ( in millions)
Pension fund 720
Future normal costs 600
Unarmortized supplemental liabilities 100
Losses from changes in actuarial assumptions. 150
TOTAL ASSETS: 1660
LIABILITIES: (in millions)
Vested accrued benefits. 540
Unvested accrued benefits. 220
Expected future service costs 900
EXPECTED BENEFITS: 1660
Required:
a). Explain the meaning of each of the terms highlighted in the balance sheet above
b). Calculate:
i). Unfunded vested accrued benefits
ii). Unfunded accrued benefits
C). Suppose normal costs do not change, show how the balance sheet would change if:
i). The value of securities in the pension fund falls by $50 million
ii). The union negotiation increased pension worth $80 million
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