PBO beginning of year
$420,000,000
$260,000,000
Service Cost
$23,000,000
$15,000,000
Benefits paid
$19,000,000
$11,000,000
Actuary discount rate
5%
5%
Beginning PBO
$420,000,000
260,000,000.00
$
Service cost
$23,000,000
15,000,000.00
$
Interest cost
$21,000,000
5% x $420,000,000
13,000,000.00
$
Loss on PBO
$0
-
$
Less: Retiree benefits
($19,000,000)
(11,000,000.00)
$
End of year PBO
$445,000,000
277,000,000.00
$
Plan Assets
$260,000,000
260,000,000
$
Return on plan assets
5%
5%
Benefits paid
$11,000,000
11,000,000
$
Cash invested
$15,000,000
15,000,000
$
Begin
$260,000,000
260,000,000
$
Actual return
$13,000,000
5% x $260,000,000
13,000,000
$
Cash contributions
$15,000,000
15,000,000
$
Less: Retiree benefits
($11,000,000)
(11,000,000)
$
End
$277,000,000
277,000,000
$
Pension plan amended
Prior service cost
$90,000,000
180,000,000
$
Service cost
$28,000,000
46,000,000
$
Interest cost
$13,000,000
22,000,000
$
Return on plan assets
$13,000,000
22,000,000
$
Expected return on plan assets
$14,000,000
24,000,000
$
Average service life
15
15
$
Service cost
$28,000,000
46,000,000
$
Interest cost
$13,000,000
22,000,000
$
Amortization of prior service cost
$6,000,000
$90,000,000/15 years
12,000,000
$
Expected return on the plan assets
($14,000,000)
(24,000,000)
$
Pension cost
$33,000,000
56,000,000
$
1/1/2024
Accumulated Postretirement benefits obligation
$200,000,000
end of 2024
Benefits paid
$15,000,000
Service cost
$7,000,000
revise downward the estimate of APBO
$5,000,000
discount rate
6%
EPBO
$195,000,000
interest cost
$11,700,000
12/31/2024
APBO
$188,000,000
Begin 2024 ABPO
$200,000,000
Service cost
$7,000,000
Interest cost
$12,000,000
6% x $200,000,000
Gain on ABPO
($5,000,000)
Less: Retiree benefits
($15,000,000)
End 2024 ABPO
$199,000,000
100,000,000
$
11,000,000
$
7,000,000
$
4,000,000
$
7%
96,000,000
$
100,000,000
$
7,000,000
$
7,000,000
$
(4,000,000)
$
(11,000,000)
$
99,000,000
$
interest cost
increase
amortization of prior service cost
no effect
decrease in average life expectancy of employees
decrease
increase in average life expectancy of employees
increase
plan amendment that increases benefits is made retroactive to prior years
increase
increase in the actuary's assumed discount rate
decrease
cash contributions to the pension fund by the employer
no effect
benefits are paid to retired employees
decrease
service cost
increase
return on plan assets during the year are lower than expected
no effect
return on plan assets during the year are higher than expected
no effect
Prior service cost at 1-1-24 from plan amendment at beginning of 2021
$161,000,000
amortization
$23,000,000/yr
net lost-aoci at 1-1-24
$1,030,000,000
average remaining service life
10 years
discount rate
7%
Pension expense
Service cost
$99,000,000
Interest cost
$175,000,000
Expected return on plan assets
($230,000,000)
Amortization portion of:
prior service cost
$23,000,000
Net loss or (gain)
$78,000,000
2024 Pension expense
$145,000,000
147,000,000
$
PBO
21,000,000
$
beginning of 2024
$2,500,000,000
2,300,000,000
$
930,000,000
$
Service cost
$99,000,000
97,000,000
$
10
Interest cost, 7%
$175,000,000
161,000,000
$
7%
Loss (gain) on PBO
($33,000,000)
(31,000,000)
$
Less: Retiree benefits
($76,000,000)
(72,000,000)
$
End of 2024
$2,665,000
2,455,000
$
97,000,000
$
161,000,000
$
Determining Net Loss Amortization
(210,000,000)
$
Net Loss
$1,030,000,000
930,000,000
$
10% of $2,500,000,000
$250,000,000
230,000,000
$
21,000,000
$
Excess at beginning of year
$780,000,000
700,000,000
$
70,000,000
$
Average remaining service period
10
10
139,000,000
$
Amount amortized to 2024 pension expense
$78,000,000
70,000,000
$
Plan assets
Beginning of 2024
$2,300,000,000
2,100,000,000
$
Return on plan assets, 8% (10% expected)
$184,000,000
168,000,000
$
Cash contributions
$109,000,000
107,000,000
$
Less: Retiree benefits
($76,000,000)
(72,000,000)
$
End of 2024
$2,517,000,000
2,303,000,000
$
($46,000,000)
(42,000,000)
$
Record annual pension expense
1
Pension expense
Plan Assets
Amortization of prior service cost-OCI
Amortization of net loss-OCI
PBO
Record change in plan assets
2
Loss-OCI
Plan assets
Record change in PBO
3
PBO
Gain-OCI
Record cash contributions
4
Plan Assets
Cash
Record retiree benefits paid
5
PBO
Plan assets
$145,000,000
139,000,000
$
$230,000,000
210,000,000
$
$23,000,000
21,000,000
$
$78,000,000
70,000,000
$
$274,000,000
258,000,000
$
$46,000,000
42,000,000
$
$46,000,000
42,000,000
$
$33,000,000
31,000,000
$
$33,000,000
31,000,000
$
$109,000,000
107,000,000
$
$109,000,000
107,000,000
$
$76,000,000
72,000,000
$
$76,000,000
72,000,000
$
PBO
Plan Assets
1-1 Balance
$1,200,000,000
1,280,000,000
$
1-1 Balance
Service cost
$94,000,000
98,000,000
$
Actual Return on plan assets
Prior service cost
$46,000,000
50,000,000
$
Contributions 2024
Interest cost (5%)
$60,000,000
64,000,000
$
Benefits paid
Benefits paid
($88,000,000)
(96,000,000)
$
12-31 Balance
$1,312,000,000
1,396,000,000
$
12-31 Balance
Pension expense
Expected LT rate of RPA
Service Cost
$94,000,000
98,000,000
$
Amended pension formula
Interest cost
$60,000,000
64,000,000
$
Prior service cost
Expected return on plan assets
($57,000,000)
(61,000,000)
$
Amortization of prior service cost
$0
-
$
Amortization of net gain (loss)-AOCI
$0
-
$
Pension expense
$97,000,000
101,000,000
$
Record pension expense
$570,000,000
610,000,000
$
1
Pension expense
$58,000,000
62,000,000
$
Plan assets
$94,000,000
98,000,000
$
PBO
($88,000,000)
(96,000,000)
$
Record gain (loss) on plan assets
2
Plan assets
$634,000,000
674,000,000
$
Gain-OCI
Record prior service cost
10%
10%
3
Prior service cost-OCI
PBO
$46,000,000
50,000,000
$
Record funding
4
Plan assets
Cash
Record payment of retiree benefits
5
PBO
Plan Assets
$97,000,000
101,000,000
$
$57,000,000
61,000,000
$
$154,000,000
162,000,000
$
$1,000,000
1,000,000
$
$1,000,000
1,000,000
$
$46,000,000
50,000,000
$
$46,000,000
50,000,000
$
$94,000,000
98,000,000
$
$94,000,000
98,000,000
$
$88,000,000
96,000,000
$
$88,000,000
96,000,000
$
Annual Retirement Benefits
1.3% x service years x final year's salary
Hired
2010
Expected retirement
2044
35 years
Retirement expected
18 years
Salary 2024
$87,000
Salary retirement
$265,000
Discount rate
9%
1
1.3% x 14 x $265,000
$48,230
$48,230 x 8.75563
$422,284
PVA, n=18,i=9%
$422,284 x 0.16370
$69,127
PV, n=21,i=9%
2
1.3% x 1 x $265,000
$3,445
3
$3,445 x 8.75563
$30,163
PVA, n=18,i=9%
$30,163 x 0.17843
$5,382
PV, n=20,i=9%
4
$69,128 x 9%
$6,222
5
PBO at beginning of 2024
$69,128
Service cost
$5,382
Interest cost
$6,222
PBO at end of 2024
$80,732
1.2% x service years x final year's salary
2010
2044
35 years
18 years
95,000
$
305,000.00
$
9%
1.2% x 14 x $305,000
$51,240.00
$51,240 x 8.75563
$448,638.23
$448,638 x 0.16370
$73,441.21
1.2% x 1 x $305,000
3,660
$
$3,660 x 8.75563
$32,045.59
$32,046 x 0.17843
$5,717.92
$73,411 x 9%
6,610
$
73,441
$
5,718
$
6,610
$
85,769
$
Annual Retirement Benefits
1.6% x service years x final year's salary
1
Hired
2010
Expected retirement
2044
35 years
Retirement expected
18 years
Salary 2024
$99,000
Salary retirement
$325,000
Discount rate
9%
2
Amended pension formula 2025
1.8% x service years x final year's salary
3
4
5
Annual Retirement Benefits
1.3% x service years x final year's salary
1
Hired
2010
Expected retirement
2044
35 years
Retirement expected
18 years
Salary 2024
$87,000
Salary retirement
$265,000
Discount rate
9%
2
Amended pension formula 2025
1.4% x service years x final year's salary
3
4
5
PBO w/o amendment
PBO w/ amendment
1.6% x 15 x $325,000
$78,000
1.8% x 15 x $325,000
$78,000 x 8.75563
$682,939
PVA, n=18,i=9%
$87,750 x 8.75563
$682,939 x 0.17843
$121,857
PV, n=20,i=9%
$768.307 x 0.17843
Prior service cost
$15,232
$15,232/20
$762
1.8% x 1 x $325,000
$5,850
$5,850 x 8.75563
$51,220
PVA, n=18,i-9%
$51,220 x 0.19442
$9,962
PV, n=19,i=9%
$137,089 x 9%
$12,338
Service cost
$9,962
Interest cost
$12,338
Return on plan asset
($15,000)
10% x $150,000
Amortization of prior service cost
$762
Pension expense
$8,062
PBO w/o amendment
PBO w/ amendment
1.3% x 15 x $265,000
$51,675
1.4% x 15 x $265,000
$51,675 x 8.75563
$452,447
PVA, n=18,i=9%
$55,650 x 8.75563
$930,150 x 0.17843
$80,731
PV, n=20,i=9%
$487,251 x 0.17843
Prior service cost
$6,210
$6,210/20
$311
1.4% x 1 x $265,000
$3,710
$3,710 x 8.75563
$32,483
PVA, n=18,i-9%
$32,483 x 0.19442
$6,318
PV, n=19,i=9%
$86,941 x 9%
$7,825
Service cost
$6,318
Interest cost
$7,825
Return on plan asset
($12,000)
10% x $120,000
Amortization of prior service cost
$311
Pension expense
$2,453
$87,750
$768,306
$137,090
$55,650
$487,251
$86,941
Annual retirement benefits
1.3% x service years x final year's salary
Hired
2010
Expected retirement
2044
35 years
Retirement span
18 years
Salary 2024
$91,000
Salary retire
$285,000
Discount rate
9%
Change discount rate 2025
10%
The gain on PBO is
$19,074
Annual retirement benefits
1.5% x service years x final year's salary
Hired
2010
Expected retirement
2044
35 years
Retirement span
18 years
Salary 2024
$98,000
Salary retire
$320,000
Discount rate
8%
Change discount rate 2025
9%
The gain on PBO is
$32,288
PBO w/ previous rate
PBO w/ revised rate
1.3% x 15 x $285,000
$55,575
1.3% x 15 x $285,000
$55,575
$55,575 x 8.75563
$486,594
PVA, n=18,i=9%
$55,575 x 8.20141
$455,793
$486,594 x 0.17843
$86,823
PV, n=20,i=9%
$455,793 x 0.14864
$67,749
Gain on PBO
$19,074
PBO w/ previous rate
PBO w/ revised rate
1.5% x 15 x $320,000
$72,000
1.5% x 15 x $320,000
$72,000
$72,000 x 8.75563
$674,776
PVA, n=18,i=8%
$72,000 x 8.20141
$630,405
$674,776 x 0.17843
$144,772
PV, n=20,i=8%
$630,405 x 0.14864
$112,484
Gain on PBO
$32,288
PVA, n=18,i=10%
PV, n=20,i=10%
PVA, n=18,i=9%
PV, n=20,i=9%
GPS pension plan was underfunded from
2012
to
2018
Tru's pension plan was underfunded from
2012
to
2021
GPC Corporation
2018
Tru Incorporated
2018
Service Cost
$533,000
Non-service cost
$50,000
