A company is considering a pension plan amendment that would alter its plan to pay an annual benefit of 3.0% instead of 2.5%.
In addition, the company’s actuary recently suggested that the company may need to reduce its discount rate from 5% to 3.5% in 2015 in light of historically low interest rates.
Treating each potential change independently, comment on how each would be recorded, should the changes be enacted.
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