What does the balance in a Hybrid Pension Equity Plan account represent?

In a Hybrid Pension Equity Plan, the balance in an account typically represents a value that is designed to reflect a benefit that grows over time, combining features of both traditional defined benefit plans and defined contribution plans. Specifically, the correct choice indicates that the account balance reflects a percentage of the final average salary for each year of service.

This means that as employees accumulate years of service, their benefits are calculated based on a formula that incorporates their average salary at retirement. This approach provides a clear picture of how much the employee will receive upon retirement, linking their final payout directly to their years of service and salary history. Therefore, the account balance is more than just contributions or investment returns; it is a formula-based amount that directly correlates with the employee's career earnings and tenure.

In contrast, the other options describe different aspects of retirement accounts that may not accurately represent the benefit structure of a Hybrid Pension Equity Plan:

• The total contributions made by the employee focuses solely on the amounts paid into the plan without considering the salary aspect.

• Investment returns generated may apply to plans where investment performance directly influences account values, but in a Hybrid Pension Equity Plan, the account balance is primarily a function of the defined benefit calculation rather than individual investment performance.

• The sum of