In the defined benefit plan of Fauvel SA, members make contributions. The gross service cost for the year is 3,150,000. Member contributions amount to 210,000; they are calculated as a percentage of salary, independently of the number of years of service, and Fauvel elects to recognise them as a reduction of the service cost of the period. Other member contributions, of 85,000, increase with the number of years of service; the gross service cost already takes them into account (case data). Calculate the net service cost for the year (case data).
- Gross service cost for the year
- 3,150,000
- Member contributions independent of the number of years of service
- 210,000
- Member contributions that increase with years of service
- 85,000