Jeffery McGill has requested your advice in setting up a defined benefit pension plan for eligible employees in his company. Jeffery founded the company 28 years ago and now has 200 employees. Most of the employees are under 34 years of age and have less than two years of service. The employee profile is expected to remain the same in the future. Jeffery is at a current salary level of $300,000 and wants the plan to provide him with annual retirement income of $100,000 per year. He expects to retire in 13 years, at age 65.

Which one of the following statements describes information you need to convey to Jeffery about factors that relate to the amount of his retirement benefit?

Immediate vesting is one method of increasing his retirement benefit from the plan.

If the defined benefit plan investments outperform expectations, he will receive the largest allocation of the excess earnings.

The excess integration method could be used to increase his total retirement income.

The plan benefit he would receive from a target benefit plan would exceed the benefit from a unit-benefit plan.