As part of recent contract negotiations Peterson

Corporation has presented #294

As part of recent contract negotiations, Peterson Corporation has presented two pension plan
options to its employees. The employees are to vote on which plan they would like the company
to implement. Peterson Corporation owns and operates a chain of grocery stores throughout
western Canada and employs more than 3,000 people. Most employees have little education
and very limited accounting knowledge. Your cousin, Karen Cooper, is a cashier at a Peterson
store located in Kamloops, British Columbia, and she has asked you for help in determining
which pension option to vote for. She is confused over the terminology used in the proposal and
would like you to explain the two alternatives in simpler terms, so that she can make an
informed decision.Option 1The company will establish a defined contribution pension plan. The
company will contribute 10% of the employee's gross wages to the pension plan each pay
period. Vesting will occur immediately and the funds will be placed with an independent trustee
to be invested. Employees will have the option of contributing additional funds to the
plan.Option 2The company will establish a defined benefit plan. The plan will guarantee that
each employee will receive 2% of the average of their highest five years of salary multiplied by
the number of years the employee works for the company. The plan will be fully employer-
funded and the pension entitlement will vest after five years of continuous
service.Required:Briefly explain to Karen the difference between the two pension plan options.
You should remember that Karen is unfamiliar with pension terminology and you therefore have
to explain some of the terms used in the plan descriptions.View Solution:
As part of recent contract negotiations Peterson Corporation has presented

ANSWER
http://paperinstant.com/downloads/as-part-of-recent-contract-negotiations-peterson-corporation-
has-presented/

1/1
Powered by TCPDF (www.tcpdf.org)