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Service years x Final year's salary. Carol was hired by Perry at the beginning of...

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Accounting

Service years x Final year's salary. Carol was hired by Perry at the beginning of 2017. Clark is expected to retire at the end
of 2056 after 40 years of service. Her retirement is expected to span 15 years. At the end of 2026,10 years after being
hired, her salary is $60,000. The company's actuary projects Clark's salary to be $210,000 at retirement. The actuary's
discount rate is 6%.
Percentage of final year's salary
Total years of service
Service years through December 31,2026
Clark's salary at December 31,2026
Retirement is expected to span
Clark's projected salary at retirement
Actuary's discount rate
Required:
Estimate the amount of Carol's annual retirement payments for the 15 retirement years earned as of the
end of 2026.
Suppose Perry's pension plan permits a lump-sum payment at retirement in lieu of annuity payments.
Determine the lump-sum equivalent as the present value as of the earned retirement annuity at the
expected date of retirement (the end of 2056).
3. What is the company's projected benefit obligation at the end of 2026 with respect to Carol?
-=B Graded Worksheet
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