Find the current service cost for justin medak at december

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Justin Medak, age 45, begins employment with Circle Corporation on January 1, 2020 at a starting salary of $45,000. It is expected that Justin will work for the company for 20 years, retiring on December 31, 2039, when Justin is 65 years old. It is expected that his salary at retirement will be $120,000. Further assume that mortality tables indicate the life expectancy of someone age 65 in 2039 is 12 years. Circle Corporation sponsors a defined benefit pension plan with the following formula Annual pension benefit on retirement = 2% of salary for each year of service, or 2% final salary x years of service. Assume a discount rate of 6%

Required:

Problem a. Determine the current service cost for Justin Medak at December 31, 2020. Hint: The appendix to chapter 19 will help you with setting up the solution to this question.

Reference no: EM132826548

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