Asked by Sulema Benavides on Apr 26, 2024
Verified
An employee has an average wage of $60,000 and has worked for the firm for 28 years. The defined benefit pension plan pays retirees 2.3% of the average wage times the years of service. The employee can expect to receive ________ per year upon retirement.
A) $18,000
B) $38,640
C) $45,325
D) $55,250
Defined Benefit
A type of retirement plan that promises a specified monthly benefit at retirement, which can be determined by factors such as salary history and duration of employment.
Pension Plan
A retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the worker's behalf, and the earnings on the investments generate income to the worker upon retirement.
- Utilize the core principles of pension fund administration, which involves calculating mandatory contributions according to actuarial estimates.
Verified Answer
FY
Learning Objectives
- Utilize the core principles of pension fund administration, which involves calculating mandatory contributions according to actuarial estimates.