As a member of the company's defined benefit plan,employees receive a pension based on one percent of the average of their best three years' earnings for each year of service.What will be your annual pension if you retire after 30 years of service and have averaged $50,000 per year during your three best years?

A) $15,000
B) $28,000
C) $30,000
D) $50,000

Question

Anamika Kundu · Accepted Answer

Final Answer : A, Explanation :  The annual pension is calculated as 1% of the average of the best three years' earnings ($50,000) for each year of service (30 years), which equals $50,000 * 0.01 * 30 = $15,000.

Definitions

Learning Objectives

Learning Objectives

Related questions