Winona Corp Pension Plan Analysis: Calculation of Pension Expense, Contributions, and Funded Status

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Winona Corp Pension Plan Analysis: Calculation of Pension Expense, Contributions, and Funded Status Winona Corp's defined benefit pension plan had an amendment as of January 1, 2014, that retroactively included benefits of $1,500,000. The remaining service life of the employees impacted by this change is 10 years. Winona uses the straight - line method to amortize the prior service cost. As of January 1, 2014, Winona had the following information related to its pension plan, including adjustments for the plan amendment: Accrued/prepaid pension cost (credit) $3,790,000 Projected benefit obligation 5,200,000 Accumulated other comprehensive income (debit) 1,500,000 Fair value of plan assets 1,410,000 Interest (discount) rate 10% Expected rate of return on plan assets 12% The actuary reported service cost of $600,000 in both 2014 and 2015. Annual payments to retirees totaled $90,000. The trustee of the plan assets reported the actual rate of return to be 11% in 2014. Winona's annu a l year - end contribution to the plan equals the current yea rs’ service cost less actual return on plan assets plus interest growth of the projected benefit obligation and amortization of prior service costs and/or gains and losses as calculated for pension expense. Required (a through g….see both pages below) : a. Compute Winona's 2014 contribution.
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