Sachs Brands defined benefit pension plan specifies annual r

Sachs Brands\' defined benefit pension plan specifies annual retirement benefits equal to: 14% service years x final years salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years\' service. Her retirement is expected to span 18 years Davenport\'s salary is $92,000 at the end of 2018 and the company\'s actuary projects her salary to be $290,000 at retirement. The actuary\'s discount rate is 6%. (FVofS1. PyofS1. EVAofSt PVAoS1. EVADorst and PVADors) (Use appropriate factor(s) from the tables provided.) Required: 2. Estimate by the accumulated benefits approach the amount of Davenport\'s annual retirement payments earned as of the end of 2018. 3. What is the company\'s accumulated benefit obligation at the end of 2018 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) 4. W no estimates are changed in the meantime, what will be the accumulated benefit obligation at the end of 2021 three years later) when Davenport\'s salary is $125,000? (Do not round intermediate calculations. Round your final answer to nearest whole dollac.) 2. Annual retirement payments 3 Accumulated beneft obligation 2018 Accumulated beneft obligation 2021 5 0 LLE

Solution

Annual retirement Benefit Plan 1.4% *Service Year*final years salary Angela detail Expected year of service 35 years Retirement Span 18 years Salary at the end of year 2018 $92,000 Projected Salary at the end of retirement 290000 Actuary Discount Rate 6% Completed year of service till 2018 from 2004 15 years 2 Estimate by the projected benefits approach the portion of Davenport\'s annual retirement payments attributable to 2018 service 1.4% × 15 years × $920,000 =   $                                                         19,320.00 3 What is the company’s accumulated benefit obligation at the end of 2018 with respect to Davenport The present value of the retirement annuity as of the retirement date (end of 2038) is $19,320× 10.8276* = $209189 * present value of an ordinary annuity of $1: n= 18, i= 6% (from PVA of $1 The Annual Benefit Obligation is the present value of the retirement benefits at the end of 2018: $209189 × 0.311805* = $65226 * present value of $1: n= 20, i= 8% (from PV of $1 0.311805 65226.12 4 If no estimates are changed in the meantime, what will be the accumulated benefit obligation at theend of 2021 (three years later) when Davenport’s salary is $125,000? Annual retirement Plan 1.4 × 18 × $125,000 = $31,500 The present value of the retirement annuity as of the retirement date (end of 2038) is $31500 × 10.8276* = $341069 * present value of an ordinary annuity of $1: n= 18, i= 6% (from PVA of $1 The Annual Benefit Obligation is the present value of the retirement benefits at the end of 2021: $341069 × 0.3171364* = $126660 * present value of $1: n = 17, i = 6% (from PV of $1