Reference no: EM132536424

Question - On January 1, 2019, a company's defined benefit pension plan had a projected benefit obligation (PBO) of $380,000. The fair value of its pension plan assets on January 1 was $350,000. During 2019, the company contributed $50,000 to the pension plan and paid pension benefits to retirees in the amount of $70,000. The settlement rate for the pension plan for 2019 was 12%. Service cost for the year was estimated to be $109,000. The expected rate of return on pension plan assets was 8%, but there was a negative actual return on pension plan assets of -10% due to risky investments that performed substantially worse than expected (i.e., there was an actual loss on pension plan assets of 10%). The beginning net actuarial gain in "AOCI-Actuarial Gains and Losses" was $37,000.

Required - By how much was the pension plan over- or under-funded at December 31, 2019?

A. Under-funded by $182,680.

B. Under-funded by $106,600.

C. Over-funded by 182,680.

D. Under-funded by $169,600.

E. Under-funded by $119,680.