Total Periodic Pension Expense

CFA Level II
#1

Beginning Projected Benefit Obligation $3,125 Ending Projected Benefit Obligation $5,520 Beginning plan assets 1,555 Ending plan assets 2,905 Employer Contributions 950 Payments to retirees 1,120

A. The total periodic pension cost is $95 million. B. The total periodic pension cost is $1,045 million.

C. The total periodic pension cost is $1,995 million

Correct Answer A

Total periodic pension cost: Ending funded status-employer contributions beginning funded status 2,615-950-1,570 = $95 million

My calculation is Employer Contributions - ((End F/S)-(Beg F/S)) 950-((-2615)-(-1570)) = 1995 could this be an error from the Finquiz Mock

#2

Total periodic pension cost: Ending funded status-employer contributions beginning funded status This formula is wrong, because you need to look at the change in the funded status, not the ending funded status. I got $1995 as well. And this is precisely the reason why I avoided third party mocks. The material is hard as is - you can do without being confused with faulty questions/solutions.

#3

My answer is: C ($1995 Million)

I used this formula:

Total periodic pension cost= Ending funded status-employer contributions- beginning funded status