Page 270 - Group Insurance and Retirement Benefit IC 83 E- Book

Employee Benefits 219

vested benefits would become vested was three years; the past service
cost arising from additional non-vested benefits is therefore recognised on
a straight-line basis over three years. The past service cost arising from
additional vested benefits is recognised immediately (paragraph 94 of the
Standard).

Changes in the Present Value of the Obligation and in the Fair
Value of the Plan Assets

The first step is to summarise the changes in the present value of the
obligation and in the fair value of the plan assets and use this to determine
the amount of the actuarial gains or losses for the period. These are as
follows:
(Amount in Rs.)
20X4-X5 20X5-X6 20X6-X7
Present value of obligation, 1 April 1,000 1,141 1,197

Interest cost 100 103 96

Current service cost 130 140 150
Past service cost – (non vested benefits) - 30 -
Past service cost – (vested benefits) - 50 -

Benefits paid (150) (180) (190)
Actuarial (gain) loss on obligation
(balancing figure) 61 (87) 42

Present value of obligation, 31 March 1,141 1,197 1,295

Fair value of plan assets, 1 April 1,000 1,092 1,109

Expected return on plan assets 120 121 114

Contributions 90 100 110
Benefits paid (150) (180) (190)

Actuarial gain (loss) on plan assets
(balancing figure) 32 (24) (50)

Fair value of plan assets, 31 March 1,092 1,109 1,093
Total actuarial gain (loss) to be recognised
immediately as per the Standard (29) 63 (92)