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CFAI Mock Exam AM Question 17

CFAI Mock Exam AM Question 17

The way they get the amount of total pension cost is different from the curriculum. They use the “Net retirement expense for the year” as the total pension cost. But on the curriculum, they use the equation “total pension cost = employer contribution + Ending net pension liability - Beginning net pension liability”. If going by the equation, the total pension cost should be 3150+(65528-46697)-(58700-40900)=4181, which is a different result. Why?

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Total pension cost = contribution - (end funded status - beginning funded status)

You should minus off the change in funded status, not add

It is exactly the same thing. Fund status = negative net pension liability.

Agree, it’s a bummer.  The wording is also ambiguous.  So far the curriculum used (total/net)”periodic pension cost”, but here it’s called “Net retirement expense for the year”.  And the given/ calculated numbers don’t match.