S1: Under a defined contribution plan, the amount of a participant’s future benefits is determined by the contributions paid by the employer, the participant, or both, and the operating efficiency and investment earnings of the fund. S2: Under a defined benefit plan, the payment of promised retirement benefits depends on the financial position of the plan and the ability of contributors to make future contributions to the plan as well as the investment performance and operating efficiency of the plan. Only S1 is true None is true Only S2 is true Both are true

The return on plan assets is the increase in plan assets (at fair value), adjusted for contributions to the plan and benefits paid during the period. How is the return included in the calculation of the periodic pension expense?

Xerox reports the following pension and retiree health care ("Other") footnote as part of its 10-K report. Pension Benefits Retiree Health 2010 2009 2010 2009 (in millions) Change in Benefit Obligation Benefit obligation, January 1 $9,194 $8,495 $1,102 $1,002 Service cost 178 173 B 7 Interest cost 575 508 54 60 Plan participants' contributions 11 9 26 36 Plan amendments [19) 4 (86) 1 Actuarial loss (in) 477 209 13 124 Aquistions 140 1 1 Currency exchange rate changes (154) 373 6 15 (1) Curtailments Benefits paid/settlements Benefit obligation, December 31 Change in Plan Assets Fair value of plan assets, January 1 (670) [578] (118) (143) $9,731 $9,194 $1,006 $1,102 $7,561 $6,923 $- $- Actual return on plan assets 846 720 - Employer contribution 237 122 92 107 Plan participants' contributions 11 9 26 36 Aquistions 107 - - Currency exchange rate changes (144) 349 Benefits paid/settlements (669) 15781 (118) (143) Other (9) 16 Fair value of plan assets, December 31 Net funded status at…

What factors determine whether a pension plan is adequately capitalized or excessively capitalized?