问题如下:
Based on the case study illustration and the effect of changing the annual compensation rate, the annual unit credit for the average participant would decrease by an amount closest to:
选项:
A.€4,349.
B.€4,858.
C.€5,446
解释:
B is correct.
The final year’s estimated earnings at the end of Year 1 for the average participant would decrease by approximately €35,747.71.
Because there are now 17 years until retirement, there are 16 years until retirement from the end of Year 1. The final year’s estimated earnings, estimated at the end of Year 1, are as follows:
Current year’s salary × [(1 + Annual compensation increase)Years until retirement]
Annual compensation increase of 6%: €100,000 × [(1.06)16] = €254,035.17
Annual compensation increase of 5%: €100,000 × [(1.05)16] = €218,287.46
The estimated annual payment for each of the 20 years (retirement life expectancy) is (Estimated final salary × Benefit formula) × Years of service
Annual compensation increase of 6%: (€254,035.17 × 0.01) × (10 + 17) = €68,589.50
Annual compensation increase of 5%: (€218,287.46 × 0.01) × (10 + 17) = €58,937.61
The value at the end of Year 17 (retirement date) of the estimated future payments is the PV of the estimated annual payment for each of the 20 years at the discount rate of 4%:
Annual compensation increase of 6%: PV of €68,589.50 for 20 years at 4% = €932,153.69
Annual compensation increase of 5%: PV of €58,937.61 for 20 years at 4% = €800,981.35
The annual unit credit = Value at retirement/Years of service:
Annual compensation increase of 6%: €932,153.69/27 = €34,524.21
Annual compensation increase of 5%: €800,981.35/27 = €29,665.98
The annual unit credit for the average participant would decrease by €34,524.21 – €29,665.98 = €4,858.23.
Annual compensation increase of 6%: (€254,035.17 × 0.01) × (10 + 17) = €68,589.50
Annual compensation increase of 5%: (€218,287.46 × 0.01) × (10 + 17) = €58,937.61
这一步可以解释一下吗?不懂