Question

2. Dill Computer has Defined Benefit Plan. Dill Computer has a 3 to 7 year Graduated vesting schedule. Billy and Danielle both qualify and participate in the plan. Billy has been working for the firm for 2 years and Danielle has been working for 5 years. a. To what levels are both Billy and Danielle vested in employer contributions? b. Assuming that the plan is considered top heavy, to what levels are both Bill and Danielle vested in employer contributions based upon both alternative schedules.

Answer 1

solution i Dill computer has defined benefit plan. Level of rested in the company raries from Company terms ,In general if 3 20 7 years rested schedule is there than post 3 years 20%, 4 years 40%, syears 60% 6 years 80% and for fully vasted 7 years 100%. so billy may have to work for one more year to be eligible or qualify for defined benifit plan. Danielle as per above calculation, can be rested for 60% & Defined benefit plan is a type of pension plan. The retirement benefits for each employee is calculated using a defined formula which has salasy history and length of service in the company as the parameters.