ACC $302-$ Pensions $-$ Class Activity $3$

Jim is an employee of Cardinal Corp. In $20$x$3,$ after $13$ years if faithful service, Cardinal initiated a defined benefit pension plan for Jim. Accoruting to the plan's benefit formula, at the end of each year during retirement, Jim will receive $3\%$ of the salary that he earned during his final year of employment for each year of service.

The Actuary estimates that Jim will retire in $5$ years, after which he should live another $4$ years. Jim's salary for $202$ was $$29,000.$ For $203$ it is $$30,000.$ Cardinal estimates that Jim will receive an annual raise of $$1,000$ each year until retirement.

Cardinal will fund the plan by making contributions of $$9,981$ each year beginning December $31,203($now$).$ The beginning PBO $($and PSC$)$ is $$24,425.$

Answered over $90$d ago