Pension Plan Begins; Wicked Witch Water Company begins a dened benefit pension program for its sole employee, Mrs. Flying Monkey, on January 1, 2001. The retirement plan stipulates that, once retired, Mrs. Monkey will receive 2.5% of her final salary for each year she has worked. But, Mrs. Monkey must work for 5 more years before Wicked Witch is committed to paying any retirement benefits. 011 January 1, Mrs. Monkey has worked at Wicked Witch for 6 years and is expected to work an additional 15 years before retirement. She is expected to live 10 years after she retires. When initiated, the pension plan originally only gives credit for years worked m the plan's inception. Wicked Witch has a tax rate of 40%, uses a discount rate of 8%, and assumes that Mrs. Flying Monkey will receive annual compensation increases of 4% until she retires. On January 1St her salary is $5,000. Even though Wicked witch is not committing to any benefits until Flying Monkey fulfills another 5 years of service, they will contribute $700 to a fund set aside to pay any future benefits she is due