Dianna participates in a defined benefit plan that uses a fixed formula providing an employee with a benefit of 2% for each year of service,up to a maximum of 30 years.The total percentage accumulated before retirement is applied to the average of her three highest years of salary.Dianna works for 21 years,and the average of her three highest years of salary is $290,000.Calculate the amount of retirement benefits she will receive each year.
A)$0
B)$102,800
C)$110,000
D)$250,000
E)None of these

Question

Quizplus · Accepted Answer

However,this amount is subject to an annual average maximum compensation limit (for 2012 is $250,000,for 2013 is $255,000,and for 2014 is $260,000).So the maximum amount is $255,000 [($250,000 + $255,000 + $260,000)/3].Thus,the amount Dianna receives is $107,100 ($255,000 × 42%).

Dianna Participates in a Defined Benefit Plan That Uses a Fixed