In a Recent Flood Some Company Records Have Been Partially

question 65

Essay

In a recent flood some company records have been partially destroyed and it is your job to help reconstruct the missing data. For one of the company employees, Piper Jones, you have managed to gather some information regarding her pension. She currently earns $65,000 per year and expects to be paid through the company's defined benefits pension plan 10% of her final salary for each year of service. Given the state of the company, salaries are not expected to increase. You know that the pension payments should continue until her death, which actuaries expect to be when she turns 85 years old. You also know that the value of the future annuities at date of retirement should be $85,560 to fulfill this commitment. Piper has just turn 45, however, you do not know her planned retirement age.
Required:
a. Determine Piper Jones planned retirement age assuming the company uses 5% interest rate for its pension plans.
b. Determine the current service cost for Piper Jones' pension for the past year (the year just before she turned 45).

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Definitions:

Organizational Norms

The shared expectations and rules that guide behavior of people within an organization.

Disjunctive Socialization

is a process in which new members of a group or organization have to acquire knowledge and skills that are significantly different from those of existing members.

Institutionalized Socialization

The process by which individuals are taught and trained to internalize and follow the norms, values, and behaviors considered appropriate within a given society or organization.

Disjunctive Tactics

Strategies or methods that involve choosing alternatives that are not naturally connected or are divergent in approach.