Company XYZ provides a hybrid pension plan to its employees, a DB plan with a DC growth potential. At retirement, its employee receives whichever of the following with greater value: (a). A DB plan with a whole life annuity payable at the beginning of each month starting upon retirement. The accrual rate is 2% and the final salary is the average annual salary in the last three years of employment, (b). The total value of the contribution account. An employee entered the plan when he just turned 25, on January 1, 2024. You are given that: (i) The contribution from the employee and the employer is 14% of the annual salary in total, paid at the end of each year. (ii) The salary scale is sx = 1.05x. Salary is increased at the end of each calendar year. (iii) The retirement age is 65. (iv) His annual salary is $60,000 in 2024. (v) The investment return on the contribution account is 7% per year. (vi) a (12) = 13.5. What is the value of this employee's pension plan upon retirement at age 65

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Answer To calculate the value of the employees pension plan upon retirement at age 65 we need to cal... View the full answer