Question

Dean has earned $71,750 annually for the past six years working as an architect for WCC Inc. Under WCC's defined benefit plan (which uses a 7-year graded vesting schedule) employees earn a benefit equal to 4.0% of the average of their three highest annual salaries for every full year of service with WCC. Dean has worked for six full years for WCC and his vesting percentage is 80%. What is Dean's vested benefit (or annual retirement benefit he has earned so far)?

Answer 1

Answer:

The Deans vested benefit will be $13,776.

Explanation:

We can take out the Dean's vested benefit or you can say the annual retirement benefit he has earned so far by multiplying the average of three highest annual salaries by benefit percentage and also multiplying that by the vesting percentage of Deans and the number of years for which he has worked under WCC inc .

DEAN VESTED BENEFIT =

Average of 3 annual salaries x benefit % x vested % of dean x number of

                                                                                        years dean has worked

Firstly here we have to take out the average salary of 3 years,

$71,750 x 3 / 3

= $71,750

DEAN VESTED BENEFIT =

$71,750 X 4% X 80% X 6

= $13,776