Pure Case Scenario
Lorelei Chan is a relationship manager at Northcross and Co., a firm offering outsourced chief investment officer (CIO) services to small and mid-sized institutions, including banks, insurance companies, and retirement plans. She is meeting with Anabelle Li, a new risk officer at Pure Mobilebank. Pure, a Northcross client and startup firm, offers community banking services exclusively in a mobile and online format, forgoing physical bank branches. Li has asked to meet with Chan in order to review the bank’s investment policy statement.
Li continues, “The plan’s benefit is defined as a percentage of each year’s compensation subject to a fixed 4% annual interest rate credit accumulating each year to a total lump sum. Pure, which has sufficient cash flow, has a policy of contributing an amount sufficient to cover accumulated vested plan benefits annually into a corporate trust. The plan’s trust portfolio is entirely composed of fixed-income securities. The employee gradually accrues rights to the full amount of the benefit from the beginning of Employment Years 3 through 6. Upon separation from employment, the employee may receive distribution of the entire vested benefit or leave it in the plan to accumulate further. Those who do not remain employed long enough to become fully vested forfeit some or all of the benefit. Pure uses these forfeited funds to reduce its future contributions to the plan’s trust. A majority of the participating technical employees remain at least five years, and we lose only about 20% of our staff within the first four years. The average tenure of our technical staff is 5.5 years. Exhibit 2 shows some of the characteristics of the portfolio backing the benefit.”
看了半天再看解析。。。为什么不能选A和B，求知识点
Banking 和fixing income security 咋就没关系了？
