Determine the Maximum Annual Benefits Payable in 2019 to a Participant

question 32

Essay

Determine the maximum annual benefits payable in 2019 to a participant from a defined benefit plan in the following independent situations:
a.Jacob, age 67, has been a participant for 14 years, and his highest average compensation for
3 years is $92,000.
b.Sloane, age 66, has been a participant for 8 years (12 years of service), and her highest average compensation for 3 years is $119,000.

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Definitions:

Transactions Costs

Expenses incurred when buying or selling goods or services, including search, bargaining, and enforcement costs.

Legal System

The framework of rules, laws, and regulations established by a government or society to maintain order and protect persons and property.

Ownership Rights

Legal rights that confer the possession, use, and transferability of a property or asset to its owner.

Market Participants

Entities or individuals that engage in the buying, selling, or exchange of goods and services in a particular market.