A Pension Fund Will Owe $15 Million to Retirees in 20

question 37

Multiple Choice

A pension fund will owe $15 million to retirees in 20 years.An actuary assumes a 6% rate of return on the funds invested in the pension plan but the fund actually earns 8%.The pension plan receives annual contributions from the company sponsor.If the 8% rate of return is expected to continue,by how much can the company reduce its pension payments per year?

• A) $65,437
• B) $79,985
• C) $89,462
• D) $95,320

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