Unit benefit formula

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Unit benefit formula

Method used to determine a participant's benefits in a defined benefit plan. Involves multiplying years of service by the percentage of salary.

Unit Benefit Formula

In a defined-benefit plan, a method used to determine how much money the beneficiary receives each month. A defined-benefit plan is a retirement plan or other annuity in which the annuitant knows in advance how much he/she will be entitled to when he/she begins receiving payments. The unit benefit formula is thus stated in the annuity contract and is usually some function of the amount the annuitant contributed combined with the number of years he/she contributed.
References in periodicals archive ?
Although teachers' unit benefit formulas are usually less generous than those for general employees, any savings from slowing state employment may be offset by increases in added teacher employment.