Postretirement benefits; relationship among elements of postretirement benefit plan
Response to the following problem:
The information below pertains to the retiree health care plan of Thompson Technologies:
| |
($in 000s) |
|
2016
Beginning Balances
|
2016
Ending Balances
|
|
Accumulated postretirement benefit obligation
|
$460
|
$485
|
|
Plan assets
|
0
|
75
|
|
Funded status
|
(460)
|
(410)
|
|
Prior service cost-AOCI
|
120
|
110
|
|
Net gain-AOCI
|
(50)
|
(49)
|
Thompson began funding the plan in 2016 with a contribution of $127,000 to the benefit fund at the end of the year. Retirees were paid $52,000. The actuary's discount rate is 5%. There were no changes in actuarial estimates and assumptions.
Required:
Determine the following amounts for 2016:
1. Service cost.
2. Postretirement benefit expense.
3. Net postretirement benefit liability .