Dean has earned $70,000 annually for the past five 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 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)?

Question

Quizplus · Accepted Answer

$7,350: $70,000 (average salary for the prior three years) × 17.5% (3.5% × 5 years of service) × 60% (vesting percentage).

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