A participant who has 40 service credits and is eligible today to receive a Normal Retirement Benefit would receive how much per month?

A participant who has 40 service credits and is eligible today to receive a Normal Retirement Benefit would receive how much per month?

• A. $1,360.00
• B. $1,000.00
• C. $1,520.00
• D. $1,280.00

Answer: (D)

Normal Retirement Benefit in many pension plans is a fixed monthly amount determined by the years of service and an accrual rate. In this plan, each year of service contributes a set amount toward the monthly benefit. With 40 service credits, the monthly benefit is 40 × 32 dollars, which equals 1,280 per month. Since eligibility is today, that 1,280 per month is available now as the Normal Retirement Benefit. The other dollar amounts would require different service years or a different accrual rate, so they don’t align with this plan’s formula.

Normal Retirement Benefit in many pension plans is a fixed monthly amount determined by the years of service and an accrual rate. In this plan, each year of service contributes a set amount toward the monthly benefit. With 40 service credits, the monthly benefit is 40 × 32 dollars, which equals 1,280 per month. Since eligibility is today, that 1,280 per month is available now as the Normal Retirement Benefit. The other dollar amounts would require different service years or a different accrual rate, so they don’t align with this plan’s formula.