Timu joined the firm 12 years ago and is 42 today.The firm has a post-retirement health care plan with the following coverages for retirees: Age above 65 at retirement and 30 years of service = 100% coverage Age 60-65 at retirement and 30 years of service = 75% coverage
Timu is expected to retire at age 63.The present value today of 100% post-retirement health care coverage for Timu is $20,000, considering life expectancy and other factors.The present value of 75% coverage is $14,000.What is the accumulated post-retirement benefit obligation for Timu today?
A) $5,600
B) $8,000
C) $14,000
D) $20,000
Correct Answer:
Verified
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