A higher discount rate will result in lower PBO. Reconciliation of opening and closing PBO shows:
| Beginning PBO |
$21 million |
Given |
| (+) Interest cost |
1.6 |
Given |
| (+) Service cost |
3.0 |
Given |
| (-) Benefits paid |
(1.0) |
Given |
| (+) Service cost |
3.0 |
Given |
| (-) Actuarial Changes |
(1.6) |
PLUG |
| (=) Ending PBO |
$23 million |
Given |
Changes due to actuarial assumptions = −$1.6m
(Study session 6, LOS 20.b)
