Flat Benefit Formula

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.

Notes:

There are three basic types of defined benefit plans: the flat benefit, unit benefit and variable benefit.

See also: 401K Plan, Cash Balance Pension Plan, Defined Benefit Plan, IRA, Pension Plan, Pension Shortfall, RRSP, Superannuation, Target Benefit Plan

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Flat benefit formula

Method used to determine a participant's benefits in a defined benefit plan by multiplying months of service by a flat monthly benefit.