Dean has earned $70,000 annually for the past five years working as an architect forWCC Inc. Under WCC's defined benefit plan (which uses a 7-year graded vestingschedule) employees earn a benefit equal to 3.5% of the average of their three highest annual salaries for every full year of service with WCC. Dean has worked for five full years for WCC and his vesting percentage is 60%. What is Dean's vested benefit (or annual retirement benefit he has earned so far)?
A) $42,000.
B) $0.
C) $12,250.
D) $7,350.

Question

Quizplus · Accepted Answer

Dean's average salary over the three highest years is $70,000. His benefit is 3.5% of this average for each year of service: 3.5% * $70,000 * 5 years = $12,250. His vested benefit is 60% of this amount: 60% * $12,250 = $7,350.

Dean Has Earned $70,000 Annually for the Past Five Years