Formula for Total Periodic Pension Cost

CFA Level II
#1

Is this formula right?

  • Periodic pension cost = beginning obligation + current service cost + past service costs + actuarial loss (excluding effects from actual vs expected return) + net interest expense (discount rate x benefit obligation at beg of year) – ending obligation
#2

Periodic pension cost = Current service cost + Interest Cost + Expected return on plan assets + Actuarial gains and losses + Past service cost

#3
#4
#5

You forgot the “- actuarial gains”.

Periodic pension cost = past service cost + current service cost + interest cost + actuarial losses - actuarial gains - actual return on plan assets.

#6

I didn’t forget it. Atuarial gains is negative actuarial losses. You’re not going to be given both, just one. Trying to keep the equation clean and less cluttered.

#7

good point

#8