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Determine the amounts of nonoperating assets and financial claims related to the

ID: 2452840 • Letter: D

Question

Determine the amounts of nonoperating assets and financial claims related to the retiree health and life benefits plans and pension plans that would be included in a valuation of GE.

Accumulated Postretirement Benefit Obligation (APBO)(in milions)

2000

1999

Balance at January 1

Service cost for benefits earned

Interest cost on benefit obligation

Plan amendments

Actuarial loss /gain

Benefits paid

Other

Balance at December 31

$ 4,926

165

402

948

534

(553)

-

$ 6,422

$ 5,007

107

323

-

(62)

(475)

26

$ 4,926

Fair Value of Assets (in millions )

2000

1999

Balance at January 1

Actual return on plan assets

Employer contributions

Benefit paid

Balance at December 31

$2,369

(85)

300

(553)

$ 2,031

$ 2,121

355

368

(475)

$ 2,369

Retire Benefit Liability /Asset December 31

2000

1999

Accumulated postretirement obligation

Deduct unrecognized balances

Prior service cost

Net actuarial loss

Fair value of plan assets

Net liability

$ 6,422

(999)

(818)

(2,031)

$ 2,574

$ 4,926

(100)

(61)

(2,369)

$ 2,396

Actuarial Assumption December 31

2000          1999  

1998

Discount rate

Compensation increases

Health care cost trend (a)

Return on assets for the year

7.5%          7.7%

5.0              5.0

10.0            9.0

9.5               9.5

6.75%

5.0

7.8

9.5

Accumulated Postretirement Benefit Obligation (APBO)(in milions)

2000

1999

Balance at January 1

Service cost for benefits earned

Interest cost on benefit obligation

Plan amendments

Actuarial loss /gain

Benefits paid

Other

Balance at December 31

$ 4,926

165

402

948

534

(553)

-

$ 6,422

$ 5,007

107

323

-

(62)

(475)

26

$ 4,926

Fair Value of Assets (in millions )

2000

1999

Balance at January 1

Actual return on plan assets

Employer contributions

Benefit paid

Balance at December 31

$2,369

(85)

300

(553)

$ 2,031

$ 2,121

355

368

(475)

$ 2,369

Retire Benefit Liability /Asset December 31

2000

1999

Accumulated postretirement obligation

Deduct unrecognized balances

Prior service cost

Net actuarial loss

Fair value of plan assets

Net liability

$ 6,422

(999)

(818)

(2,031)

$ 2,574

$ 4,926

(100)

(61)

(2,369)

$ 2,396

Actuarial Assumption December 31

2000          1999  

1998

Discount rate

Compensation increases

Health care cost trend (a)

Return on assets for the year

7.5%          7.7%

5.0              5.0

10.0            9.0

9.5               9.5

6.75%

5.0

7.8

9.5

Explanation / Answer

Determine the amounts of nonoperating assets and financial claims related to the

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