Henry Has a Defined Benefit Plan That Promises an Annual

question 8

Multiple Choice

Henry has a defined benefit plan that promises an annual retirement benefit based on 2% of his final 5-year average annual salary for each year of service. At retirement, Henry has 21 years of service and had an average salary of $95,000 over the last 5 years. His annual benefit will be:

• A) $95,000.
• B) $60,500.
• C) $49,875.
• D) $39,900.
• E) $15,200.

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Definitions:

Equipment

Tangible assets used in the operation or activities of a business or entity, ranging from office supplies to machinery.

Arbitration Clause

A contract provision that requires parties to settle disputes through arbitration rather than litigation in courts.

Credible Insurance

Insurance coverage provided by a reputable and financially stable company that can be trusted to pay out claims as stipulated by the policy.

Impartial Third Party

A neutral individual or entity not involved in a dispute who may assist or help resolve issues without bias.