Juliana started working at Nathalina Incorporated in 2020 at age 30 and earned a salary of $64,000
Question:
Juliana started working at Nathalina Incorporated in 2020 at age 30 and earned a salary of $64,000 in her first year. She is entitled to a pension equal to 2% of final pay for each year of service, with payment made at the beginning of each retirement year. She will work until she is 55 years old. Salaries will grow at 5% per year. Average life expectancy is 20 years after retirement. Discount rate is 6%.
Required:
Given the above information, calculate the required funding at the end of the first year (2020) and second year (2021) for the three methods: Accumulated Benefit method, Projected Unit method and Level Contribution method.
SHOW ALL CALCULATIONS for each method.
Taxation For Decision Makers 2019
ISBN: 9781119497288
9th Edition
Authors: Shirley Dennis Escoffier, Karen A. Fortin