Henry Has Been Working for Cars Corp

Essay

Henry has been working for Cars Corp. for 40 years and 4 months. Cars Corp. provides a defined benefit plan for its employees. Under the plan, employees receive 2 percent of the average of their three highest annual salaries for each full year of service. Cars Corp. uses a five year cliff vesting schedule. Henry retired on January 1, 2018 Henry received annual salaries of $520,000, $540,000, and $560,000 for 2015, 2016, and 2017, respectively. What is the maximum benefit Henry can receive under the plan in 2018?