3. ACTUARIAL LTAM QUESTION

3. For a defined benefit pension plan you are given: (i) Accrual rate is 1.6%. The pension benefit is a monthly annuity-due payable starting at age 65 base on final salary. (iii) No benefits payable for death in service. (iv) There are no exits other than death prior to retirement. Salaries increase 3% annually. (vi) i= 0.04 An employee enters the plan at age 32; at age 45 the accrued liability for the pension, using the projected unit credit method, is 324,645. Calculate the normal cost for this employee for the year beginning at age 45. Select one: O A. 24,000 o B. 25,000 C. 26,000 o D. 27,000 E. 28,000 3. For a defined benefit pension plan you are given: (i) Accrual rate is 1.6%. The pension benefit is a monthly annuity-due payable starting at age 65 base on final salary. (iii) No benefits payable for death in service. (iv) There are no exits other than death prior to retirement. Salaries increase 3% annually. (vi) i= 0.04 An employee enters the plan at age 32; at age 45 the accrued liability for the pension, using the projected unit credit method, is 324,645. Calculate the normal cost for this employee for the year beginning at age 45. Select one: O A. 24,000 o B. 25,000 C. 26,000 o D. 27,000 E. 28,000