ABC has a postretirement medical plan that provides medical

ABC has a post-retirement medical plan that provides medical care and life insurance benefits to employees who render 5 years of service and attain age 55 while in service. At the end of 2013, employee A is 33. She was hired at age 25 and is expected to retire at age 62. The expected post-retirement benefit obligation (EPBO) for employee A at the end of 2013 is $47835. For employee A calculate the following: a. Attribution period is: b. Years of service is: C. APBO end of 2013 is: d. Service cost on APBO for 2013 is:

Solution

Computation of Attribution Period Age Attain While Service 55 Age at the time of Joining 25 Attribution Period 30 Computation of Year of Service Age Presently 33 Age at the time of Joining 25 Year of Service 8 Accumulated Benefit Obligation at the end of 2013 (EPBO*8/30) = ($47835*8/30)= $12750 Service Cost (EPBO*1/30)= ($47835*1/30)=$1594.50