FINA $248$ Unit $3$ Review Questions $-$ DCPP and DBPP

What are the key differences between a DBPP and a DCPP$?$

What are the advantageous and disadvantages of a DBPP from both the employer and

employee's point of view?

What are the advantageous and disadvantages of a DCPP from both the employer and

employee's point of view?

Define and explain the following:

a$.$ Career average DBPP

b$.$ Final and Best Earnings Pension Plan

c$.$ Flat Benefit Pension Plan

George is a member of a flat benefit pension plan that pays $$1500$ per year of

employment. If George works for $25$ years how much will his pension be$?$

George has worked for ABC company for $30$ years and is a member of their career

average pension plan. His career average earnings are $$75,000.$ If he earned $2\%$ per year

of service how much will his pension be$?$

George has worked for ABC company for $25$ years and is a member of their best five

year earning pension plan. He receives a pension benefit of $3\%$ per year of service. If his

last ten years of income are as follows, what would his annual pension be$?$

$2021-80000L2020-\frac{78000.}{2019}-\frac{80000.}{2018}-\frac{70000.}{2017}-\frac{80000}{2016}-65000$

$2015-\frac{82500}{2014}-\frac{80000}{2013}-\frac{75000}{2012}-\frac{80000}{2011}-90000$

Mary is a member of a DBPP$.$ Her pension contribution is defined as $5\%$ up to the YMPE

and $8\%$ above the YMPE. If the YMPE is $$60,000$ and Mary's income is $$80,000$ how

much is her pension contribution?

Janice is a member of a DCPP whereby her employer contributes $4\%$ of her income to

the DCPP and Mary contributes $4\%$ of her income to the DCPP$.$ If Mary's income is

$$75,000$ how much is the total contribution to the DCPP in that year?

Define vesting.

What are the basic actuarial assumptions used when calculating contributions to a

DBPP$?$

What are the basic actuarial assumptions used when calculating contributions to a

DCPP$?$

Evan belongs to a defined benefit pension plan based on $2\%$ per year of service. He

currently has pensionable earnings of $$160,000$ per year. If the dollar limit of the

maximum yearly pension is $$3,025,$ how much is Evan's maximum benefit

entitlement for the current year of service?

How would that change if his DBPP was based on $1\%$ per year of service?

What is a unisex mortality table and why is it important as it pertains to pension benefit

calculations?

In general, what is the maximum amount that can be contributed to a DCPP$?$