After almost 28 full years of employment with ACME Manufacturing, Richard accepted a retirement package on December 31, 2000. He began working for ACME on January 23, 1973. The pension plan, which he joined on January 1, 1982, provided a pension of 2% for each year of plan membership based on the average of his last five years of earnings indexed to inflation. Richard's salary had been frozen at $67,000 for the last five years of his employment. His retiring allowance consisted of one week of pay for each year of employment and an allowance of six months of salary. How much did Richard's pension pay him during 2001?

Assume Richard rolled over the maximum permissible amount of his retiring allowance into an RRSP. On what portion of his retiring allowance must he pay tax?

Answer rating: 100% (QA)

To calculate Richards pension payment for 2001 we need to determine his average earnings and the num... View the full answer