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Q 3. A pension plan member is aged 56. One of the plan benefits is a death in service benefit payable on death before age 60. (i) Calculate the probability that the employee dies in service before age 60. [5 marks) (ii) Assuming that the death in service benefit is $200,000, and assuming that the death benefit is payable immediately on death, calculate the EPV at age 56 of the death in service benefit. [10 marks] (iii) Now assume that the death in service benefit is twice the annual salary rate at death. At age 56 the member's salary rate is $75,000 per year. Assuming that deaths occur evenly throughout the year, estimate the EPV of the death in service benefit. [15 marks) Basis: Service table and relative salary scale in Formuale and Tables. [Total: 30 marks) Q 3. A pension plan member is aged 56. One of the plan benefits is a death in service benefit payable on death before age 60. (i) Calculate the probability that the employee dies in service before age 60. [5 marks) (ii) Assuming that the death in service benefit is $200,000, and assuming that the death benefit is payable immediately on death, calculate the EPV at age 56 of the death in service benefit. [10 marks] (iii) Now assume that the death in service benefit is twice the annual salary rate at death. At age 56 the member's salary rate is $75,000 per year. Assuming that deaths occur evenly throughout the year, estimate the EPV of the death in service benefit. [15 marks) Basis: Service table and relative salary scale in Formuale and Tables. [Total: 30 marks)