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Old 05-17-2014, 09:15 PM
appana appana is offline
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Default EOM 3

Just had a few questions on this exercise -- would appreciate any input from others.
  1. Contribution Rates may vary between employees under the DC plan, but there needs to be a 3/4 ratio between the plan's highest and its lowest contribution rates.
  2. What is the recommended defined contribution formula for the Chocolate Factory Pension plan?

For #1, I took that to mean that if the split rate DC formula for an employee is 12% and 15%, then the lowest contribution employee needs to have bounds of 9% and 11.25%. Additionally, the final member contribution rate (Column J in the Contribution Summary tab of the Employee Data workbook), also needs to satisfy the 3/4 ratio. Is this correct?

For #2, I feel like the recommended formula changed between Task 2, 5 and 6. And I am not sure I came up with one formula that works for every employee of the Chocolate Factory. Anyone else had this issue?
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