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I have asked this question twice but both times the answer given was incorrect. Please do not post the same answer if you are the
I have asked this question twice but both times the answer given was incorrect. Please do not post the same answer if you are the one that answered last time. The first two answers are correct, I just need the final one. Thanks
Perry Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to 1.3% x Service years x Final year's salary. Carol was hired by Perry at the beginning of 2016. Clark is expected to retire at the end of 2055 after 40 years of service. Her retirement is expected to span 15 years. At the end of 2025, 10 years after being hired, her salary is $60,000. The company's actuary projects Clark's salary to be $210,000 at retirement. The actuary's discount rate is 6%. | ||||||||||
Percentage of final year's salary | 1.30% | |||||||||
Total years of service | 40 | years | ||||||||
Service years through December 31, 2025 | 10 | years | ||||||||
Clark's salary at December 31, 2025 | $60,000 | |||||||||
Retirement is expected to span | 15 | years | ||||||||
Clark's projected salary at retirement | $210,000 | |||||||||
Actuary's discount rate | 6% | |||||||||
Required: | ||||||||||
1. Estimate the amount of Carols annual retirement payments for the 15 retirement years earned as of the end of 2025. | ||||||||||
$27,300 | ||||||||||
2. Suppose Perrys pension plan permits a lump-sum payment at retirement in lieu of annuity payments. Determine the lump-sum equivalent as the present value as of the earned retirement annuity at the expected date of retirement (the end of 2055). | ||||||||||
$265,144 | ||||||||||
3. What is the companys projected benefit obligation at the end of 2025 with respect to Carol? | ||||||||||
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