Problem
Nicole Chow is a member of a defined benefit integrated pension plan with the following formula:
1. 1.75% of the average best 5 years of earnings up to the 3 year average of the year's maximum pensionable earnings (YMPE) plus
2. 2.5% of the average best 5 years of earnings that are above the 3 year average of the YMPE.
Nicole's earnings were $71,030.00; the YMPE is $64,900.00.
Calculate the pension adjustment for Nicole, assuming that she worked and was a member of the pension plan for the full calendar year.