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北美精算师2014年度收藏——SOA2003年11月真题Course8RU（二）

来源：高顿网校 2014-08-01

　　高顿网校小编友善热情提醒精算师的小盆友们拿出取胜的恒心，北美精算师2014年度收藏——SOA2003年11月真题Course8RU（二），拿下吧。
　　7. (8 points) NOC is acquiring TechCo, a private company in the country of Xanadu.

　　Xanadu has similar tax and pension legislation rules to Vosne, with the following

　　exceptions:

　　? Employees can contribute up to $5,000 per year to a DB ERP and $5,000 per year to

　　a DC ERP.

　　? Employee contributions are tax-deductible to the individual.

　　? Investment earnings on the employee contributions are not taxable until withdrawn.

　　? There are no PPAs.

　　Xanadu sponsors the following government-provided retirement income program:

　　? Both employees and employers contribute 5% of pay every year.

　　? The pension provided at retirement is equal to 50% of the best 3-year average

　　earnings, provided the contributory period was at least 30 years. A proportionately

　　reduced benefit is provided if less than 30 years of contributions were made to the

　　program.

　　? Eligibility for a pension is age 62.

　　? The pension is reduced by 5% per year that the retirement age precedes age 67.

　　TechCo did not provide either a DB ERP or a DC ERP.

　　(a) Evaluate the appropriateness of NOC establishing an ERP for the salaried

　　employees of TechCo.

　　(b) NOC’s VP of Human Resources is proposing a plan with the same provisions as

　　the Full-Time Salaried Pension Plan. Critique this proposal.

　　an alternative program for the salaried employees of TechCo.

　　Justify your recommendation.

　　**END OF EXAMINATION**

　　MORNING SESSION

　　COURSE 8: Fall 2003 -8- GO TO NEXT PAGE

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Afternoon Session

　　**BEGINNING OF EXAMINATION 8**

　　COMPREHENSIVE SEGMENT – U.S.

　　AFTERNOON SESSION

　　All Questions pertain to the Case Study8. (8 points) NOC is considering laying off part of its union workforce to reduce costs. In

　　order to avoid layoffs, the union has agreed to discuss changes to the Full-Time Hourly

　　Union Pension Plan.

　　NOC has proposed to freeze accruals in the pension plan as of September 30, 2003.

　　Under the frozen plan, benefits would be determined for all active participants based on

　　service earned through September 30, 2003, and no future benefits would accrue.

　　The union offers a counter proposal to reduce future accruals as of January 1, 2004.

　　Under the union’s proposal, benefits would accrue to December 31, 2003 at the $75 rate.

　　After December 31, 2003, benefits would accrue at a rate of $50 per year of service

　　earned after December 31, 2003.

　　(a) Estimate the change in NOC’s 2003 accounting expense if NOC’s proposal is

　　adopted.

　　(b) If the union proposal is adopted, estimate the change in the 2003 and the 2004

　　accounting expense.

　　perspectives.

　　COURSE 8: Fall 2003 -9- GO TO NEXT PAGE

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Afternoon Session

　　All Questions pertain to the Case Study

　　9. (15 points) NOC is purchasing a refinery from ABC Company, and will offer

　　employment to all of the employees at the refinery. All refinery employees are members

　　of the ABC Refinery Pension Plan and the ABC Refinery Post-Retirement Medical plan.

　　There are no other members of these plans.

　　You are given:

　　Provisions of the ABC Refinery Plans

　　The ABC Refinery Pension Plan provisions are as follows:

　　? Normal Retirement Age: Age 65

　　? Early Retirement Age: Age 60

　　? Normal Retirement Benefit: 1.75% of final earnings times years of service

　　? Early Retirement Reduction: Actuarially equivalent

　　? Normal Form of Benefit: If married, 50% joint & survivor, without

　　reduction. If not married, single life annuity

　　? Post-Retirement Indexing: Lesser of 1% or CPI

　　? Termination and Pre-Retirement Death Benefits: Lump sum value of the

　　accrued benefit, excluding indexation.

　　The ABC Refinery Post-Retirement Medical Plan provisions are exactly the same

　　as NOC’s.

　　COURSE 8: Fall 2003 -10- GO TO NEXT PAGE

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Afternoon Session

　　All Questions pertain to the Case Study

　　9. Continued

　　January 1, 2003 Membership Data – ABC Refinery Plans

　　The membership demographics of the refinery’s employees are described in the

　　following table:

　　Age <5 years

　　of service

　　5-10 years

　　of service

　　>10 years

　　of service

　　Total

　　<55 # Participants

　　Avg Salary

　　40,000

　　100

　　42,000

　　46,000

　　200

　　42,500

　　55-65 # Participants

　　Avg Salary

　　500

　　44,000

　　1,500

　　48,000

　　2,500

　　50,000

　　4,500

　　51,444

　　>65 # Participants

　　Avg Salary

　　150

　　47,000

　　350

　　52,000

　　250

　　57,000

　　750

　　52,667

　　Total # Participants

　　Avg Salary

　　700

　　44,357

　　1,950

　　48,410

　　2,800

　　55,018

　　5,450

　　51,284

　　The ABC Refinery Plans have no retirees.

　　COURSE 8: Fall 2003 -11- GO TO NEXT PAGE

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Afternoon Session

　　All Questions pertain to the Case Study9. Continued

　　January 1, 2003 Accounting Valuation Results for the ABC Refinery Plans

　　Pension Plan Post-Retirement

　　Medical Plan

　　Market value of assets $350,000,000 $0

　　PBO/APBO

　　Active members $325,000,000 $280,000,000

　　Inactive members 0 0

　　Total $325,000,000 $280,000,000

　　Service Cost $21,000,000 $15,000,000

　　Assumptions and Methods

　　Interest 8.5%

　　Salary scale 5.0%

　　Mortality GAM83

　　Turnover None

　　Retirement 100% at age 62

　　Asset valuation method Market Value

　　Actuarial cost method Projected unit credit

　　COURSE 8: Fall 2003 -12- GO TO NEXT PAGE

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Afternoon Session

　　All Questions pertain to the Case Study

　　9. Continued

　　Provisions of the Draft Purchase and Sale Agreement

　　The main provisions of the draft purchase and sale agreement, prepared by ABC,

　　for discussion with NOC, are:

　　Pension Benefits

　　? Accrued benefits under the ABC Refinery Pension Plan will become

　　the responsibility of NOC under its Full-Time Salaried Pension Plan.

　　? ABC will transfer the ABC Refinery Pension Plan assets to the NOC

　　plan, subject to regulatory approval

　　? NOC is required to provide “substantially similar” pension benefits for

　　refinery employees following the sale date.

　　Post – Retirement Medical Benefits

　　? NOC will be responsible for providing retiree medical benefits for

　　refinery employees.

　　? ABC will make a lump sum cash payment to NOC equal to the

　　accounting liabilities for post-retirement medical benefits determined

　　using the ABC accounting assumptions.

　　Analyze the terms of the agreement and recommend revisions. Justify your

　　recommendation.

　　COURSE 8: Fall 2003 -13- STOP

　　Retirement Benefits,

　　Comprehensive Segment – U.S.

　　Morning Session

　　All Questions pertain to the Case Study

　　10. (7 points) The CEO of NOC is targeting a substantial reduction in operating expenses.

　　Three alternatives are being considered:

　　(i) An employee lay-off with severance benefits.

　　(ii) A temporary early retirement pension enhancement.

　　(iii) Phased-retirement.

　　(a) Describe advantages and disadvantages of each alternative.

　　(b) Describe the accounting implications of each alternative.

　　**END OF EXAMINATION**

　　AFTERNOON SESSION
　　高顿网校之名人信念：要抒写自己梦想的人，反而更应该清醒。

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