Edge Sample Exam #8

[Brak99]

Suppose the employee works full time until age 60 and part time from age 60 to age 65. He then might have two form of payment options:

A: The "phased retirement option": Partial commencement of benefits at age 60 to supplement his income from part-time employment; full commencement of benefits at age 65.

B: No benefits paid until age 65.

Options A and B would have the same present value at age 65. I think this is what the author means by "cost neutral".