Q: In a defined benefit pension plan for public employees of a state:

(a) Employees work for 30 years earning wages that increase at a real rate of 1.0% per year.

(b) They retire with a pension equal to 60% of their final salary. This pension decreases at the real of rate of 1% per year.

(c) The pension is received for 18 years.

(d) The pension fund assets earn a real rate of 2.5%.

Find the percentage of an employee's salary that must be contributed to the pension plan if it is to remain solvent.