What is the total value of your pension liabilities

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Question: You are the CFO of termination,Inc.Your company has 40 employees, each earning a salary of $40,000/year. Employee salaries grow at 4% per year. Starting from next year, and every second year thereafter, eight employees retire and no new employees are recruited. Your company has in place a pension plan that entitles retired workers to annual pension which is equal to their annual salary at the moment of retirement. Life expectancy is 20 years after retirement, and the annual pension is paid at year-end. The return on investment is 10% per year. What is the total value of your pension liabilities as of now?

Reference no: EM133379078

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