Employer contributions for Canada Pension Plan equal 7% of the employee contribution amount.
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Which of the following is (are) included in an employee’s cost basis in a pension plan? I. Amount the employee contributed on an after-tax basis while employed. II. The aggregate of the prior insurance costs the employee has reported as taxable income. III. Other contributions made by the employer which has already have been taxed to the employer.
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Andy works at a company with a defined contribution pension plan which contributes an amount equal to 7 percent of his salary to his account while he contributes nothing. The vesting period is 5 years. He has worked there full time for 2 years at an average pay of $30,000 and the account manager has earned 7 percent per year on the pension amount. If he leaves now to take a better job, how much will remain in his pension account?
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