As a Member of the Company's Defined Benefit Plan, Employees

question 28

Multiple Choice

As a member of the company's defined benefit plan, employees receive a pension based on one percent of the average of their best three years' earnings for each year of service. What will be your annual pension if you retire after 30 years of service and have averaged $50,000 per year during your three best years?

• A) $28,000
• B) $15,000
• C) unable to determine, as we need to have know the average return on the investments funding the pension
• D) depends on how much money is in the investment trust

---

Definitions:

Double Value

A term indicating that an item’s or asset's value has increased to twice its original value.

Compounded Quarterly

Interest calculation method where the interest earned is calculated and added to the principal four times a year.

Monthly Compounded

Interest calculation method where interest is added to the principal sum of a loan or deposit each month, leading to interest on interest.

Monthly Compounding

Calculation of interest on the principal sum plus any previously earned interest on a monthly basis.