Assume the salary scale given in Table 10.1 of AMLCR 2nd edition and a valuation date of

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Question:

Assume the salary scale given in Table 10.1 of AMLCR 2nd edition and a valuation date of 1 January.

(a) A plan member aged 40 at valuation received $80,000 in salary in the year to the valuation date. Given that final average salary is defined as the average salary in the four years before retirement, calculate the member's expected final average salary assuming retirement at age 60.

(b) A plan member aged 50 at valuation was paid salary at a rate of $70,000 per year at the valuation date. Salaries are increased on average half-way through each year. Calculate the expected average salary earned in the two years before retirement at age 60.