On average,a final average earnings plan and a career average plan will generate the same level of pension income.

Question

Quizplus · Accepted Answer

A final average earnings plan calculates pension benefits based on the employee's average earnings in their final years of employment, while a career average plan calculates benefits based on earnings throughout the employee's entire career. Because a final average earnings plan only takes into account a shorter period of time, it is likely to generate higher pension benefits than a career average plan.

On Average,a Final Average Earnings Plan and a Career Average