Silver Springs Company has an unfunded retiree health care plan. Each of the company's four employees has been with the organization since its inception at the beginning of 2017. As of the end of 2018, the actuary estimates the total net cost of providing benefits to employees during their retirement years to have a present value of $196,000. Each of the employees will become fully eligible for benefits after 28 more years of service, but aren't expected to retire for 30 more years. The interest rate is 8%.
Required:
1) What is the expected postretirement benefit obligation at the end of 2018?
2) What is the accumulated postretirement benefit obligation at the end of 2018?

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The Answer of Silver Springs Company has an unfunded retiree health care plan. Each of the company's four employees has been with the organization since its inception at the beginning of 2017. As of the end of 2018, the actuary estimates the total net cost of providing benefits to employees during their retirement years to have a present value of $196,000. Each of the employees will become fully eligible for benefits after 28 more years of service, but aren't expected to retire for 30 more years. The interest rate is 8%.
Required:
1) What is the expected postretirement benefit obligation at the end of 2018?
2) What is the accumulated postretirement benefit obligation at the end of 2018?

Silver Springs Company Has an Unfunded Retiree Health Care Plan