Calculate the postretirement benefit expense

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Question - Oberon 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 year, the following plan-related data were available.

Net loss-postretirement benefit plan$10,440,000 APBO balance$103,200,000 Fair value of plan assets none Average remaining service period to retirement 20yearsAverage remaining service period to full eligibility 15years

On January 1 of the current year, Oberon amended the plan to provide dental benefits. The actuary determines that the cost of making the amendment increases the APBO by $8,850,000. Management chooses to amortize this amount on a straight-line basis. The service cost is $52,000,000. The appropriate interest rate is 10%.

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

Reference no: EM132604476

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