Suppose a male member currently aged 35, entered service at his age of 30, has a current salary of $80, 000 and total past salary of $350, 000. Assume that salaries increase at the beginning of each of the following years at a rate 2% per year. Suppose he retires at age 65.

(a) Find the projected final 5-year average salary and the career average earnings, respectively, for this member. (b) Calculate the projected annual retirement income (30 years from now) based on each of the following pension formulas: (i) 65% of the final 5-year average salary; (ii) 2.5% of career salary. (c) Calculate the EPV (expected present value) of total retirement benefits in terms of a life annuity payable at the beginning of each year (without guarantee period) for this member at his retirement date with pension formulas (i) and (ii) in (b), respectively.

Annuity functions are calculated based on 2001 CSO Mortality Table and i = 5% per annum effective. You are given that a65 = 11.21147.

(d) Using the EPV of total retirement benefits in terms of a life annuity calculated in (c), find the level annual pension income (LAPI) if the life annuity comes with a 5-year guarantee period, for this member at his retirement date with pension formulas (i) and (ii) in (b), respectively. Annuity functions are calculated based on 2001 CSO Mortality Table and i = 5% per annum effective. You are given that a70 = 9.64133.