Question
Need help with question 2!!! Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% service years final year's salary, payable at
Need help with question 2!!!
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% service years final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2008 and is expected to retire at the end of 2042 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2022 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. Use Excel to calculate the requirements below.
Required:
1. Estimate by the accumulated benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2022. 2. What is the company's accumulated benefit obligation at the end of 2022 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
3. If no estimates are changed in the meantime, what will be the accumulated benefit obligation at the end of 2025 (three years later), when Davenport's salary is $100,000? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
1. Annual retirement payments $21,600
2. Projected benefit obligation 2022
3. Projected benefit obligation 2025 $91,711
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