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Calculate postretirement benefit expense for current year

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Reference no: EM13847503

Lender Company provides postretirement health care benefits to employees who provide at least 10 years of service and reach the age of 65 while in service. On January 1 of the current calendar year, the following plan-related data were available. On January 1 of the current year, Lender amends the plan to provide dental benefits.

The actuary determines that the cost of making the amendment increases the APBO by $20,000,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $40,000,000. The appropriate interest rate is 10%.

APBO balance

$150,000,000

Fair value of plan assets

None

Average remaining service period to retirement

25 years

Average remaining service period to full eligibility

20 years

Required: Calculate the postretirement benefit expense for the current year.

Reference no: EM13847503

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