Interest expenses for pensions

CFA Level II FRA
#1

I’m forcing myself to remember this part in all of the calculations, but the logic behind interest expense still isn’t making sense.

Is the rationale behind this that the employee is earning interest (equal to the discount rate) on contributions that the employer is making? So I guess the employer is trying to offset these interest expenses with investment returns of their own (which are hopefully greater than the discount rate)?

Can someone tell me if I’m on track here?

Thanks!

#2

i made a post on this topic and saw other 2 posts on this same question. s2000magician didnt help. I asked What about the components which come in the income statement and the OCI? Under gaap and ifrs? http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91320804