Reference no: EM132856001

Questions -

Q1. Your employer uses a flat benefit formula to determine retirement payments to its employees. The fund pays an annual benefit of $2,500 per year of service. Calculate your annual benefit payments for 25, 28, and 30 years of service.

Q2. An employer uses a career average formula to determine retirement payments to its employees. The annual retirement payout is 5 percent of an employee's career average salary times the number of years of service. Calculate the annual benefit payment under the following scenarios.

Years Worked	Career Average Salary
30	$60,000
33	$62,500
35	$64,000

Q3. An employee with 25 years of service at a company is considering retirement at some time in the next 10 years. The employer uses a final pay benefit formula by which the employee receives an annual benefit payment of 3.5 percent of her average salary during her last five years of service times her total years employed. The employee's average salary over the last 5 years of service is as follows:

Average Salary during Last Five Years of Service
Retire now	$125,000
Retire in 5 years	$135,000
Retire in 10 years	$140,000

Calculate the annual benefit payment for retirement now, in 5 years, and in 10 years.