contribution benefit fund: a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. It is a tax deferred savings vehicle that allows for the tax-free accumulation of a fund for later use as a retirement income. Pensions should not be confused with severance packages; the former is paid in regular installments, while the latter is paid in one lump sum.
final pay formula:The benefit in a defined benefit pension plan is determined by a formula that can ... Final Average Pay (FAP) remains the most common type of defined benefit plan .... In the United States, the legal definition of a defined contribution ...
career average formula: alternative term is benefit plan:Most common type of pension plan in which an employer sets aside specific sums of money (based on each employee's tenure of service, age, and salary) for qualifying employees, in a separate tax deferred account. It is 'defined' in the sense that the formula for computing the employer's contribution is known in advance. Also called career average benefit formula, career average formula, career earnings formula, or defined benefit pension plan
flat benefit formula:A method of calculating an employer's contribution to an employee's defined benefit plan whereby the employer multiplies an employee's months of service by a predetermined flat monthly rate.