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In Business / High School | 2025-07-08

Question: PF2-3-1-b France has a defined benefit pension plan with her employer based on career average earnings. She has a pension benefit of 1.25% of her career average earnings and has pensionable earnings of $54,600.00. Calculate her pension adjustment for 2025.

Asked by Trickster5616

Answer (1)

To calculate France's pension adjustment, we need to understand the components and formula involved in a defined benefit pension plan, particularly focusing on the career average earnings aspect.

Pension Benefit Calculation :

The benefit is calculated as a percentage of the career average earnings.
France has a benefit percentage of 1.25%.


Career Average Earnings :

Given that her pensionable earnings are $54,600.00, this figure likely represents her average earnings upon which the pension is calculated.


Pension Adjustment Calculation :

The pension benefit can be calculated as: Pension Benefit = Career Average Earnings × Benefit Percentage = $54 , 600 × 100 1.25 ​
Simplifying the expression: Pension Benefit = $54 , 600 × 0.0125 = $682.50



Therefore, the pension adjustment for 2025, based on the provided information, would be $682.50.
This means that France would receive an annual pension amount of $682.50, considering this is strictly based on her average career earnings and the percentage benefit outlined by her employer's defined benefit plan.

Answered by danjohnbrain | 2025-07-21

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