Flat Benefit Formula

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS 'Flat Benefit Formula'

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

RELATED TERMS
  1. Benefit Allowance

    Money that a company or government agency provides to an employee ...
  2. Coinsurance Formula

    The homeowners insurance formula that determines the amount of ...
  3. Cash Balance Pension Plan

    A pension plan under which an employer credits a participant's ...
  4. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
RELATED FAQS
  1. What protections are in place for a whistleblower?

    Whistleblowers can play a critical role in ensuring the compliance, safety, honesty and legal fairness of governments and ... Read Full Answer >>
  2. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
  3. How much will an employer generally contribute to a 401(a) plan?

    The amount an employer contributes to an employee's 401(a) retirement savings plan can vary from plan to plan. 401(a) plans ... Read Full Answer >>
  4. When can benefits be received from a provident fund?

    Like most retirement savings vehicles, participants in provident funds are eligible to receive benefits at retirement. However, ... Read Full Answer >>
  5. Is Social Security Income a perpetuity?

    Because Social Security income does not continue indefinitely, it cannot be classified as a perpetuity. What Is a Perpetuity? A ... Read Full Answer >>
  6. What types of investments are allowed in a provident fund?

    Different provident funds have different investment rules and restrictions. The allowable investments in an Indian provident ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Employee Benefits: How To Know What To Choose

    Starting a new job is stressful but you don't need to sweat about setting up a benefits package.
  2. Taxes

    Are You Paying Too Much in Taxes?

    Overpaying taxes amounts to an interest-free loan to the government. Here are some ways to avoid that scenario.
  3. Retirement

    Calculating Volume Weighted Average Price

    Volume weighted average price, or VWAP, is the average value of a stock traded over the course of a set time horizon, which is typically one day.
  4. Investing Basics

    Will Nepotism Kill Wal-Mart?

    Wal-Mart recently appointed Greg Penner, grandson-in-law of its founder to the post of Board Chairman. Should investors be concerned about nepotism?
  5. Personal Finance

    6 Websites Where You Can Book a Private Jet

    These sites can help you get the flights and destinations you desire – and sometimes, even just a seat instead of a whole plane.
  6. Insurance

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
  7. Personal Finance

    Hiring a Nanny? 20 Questions to Ask First

    How to find a caregiver who'll fit into your family – and which questions you can't ask.
  8. Retirement

    401(k) Rollovers: The Tax Implications

    The tax rules for 401(k) rollovers can be simple or more complex, depending on which path you take.
  9. Retirement

    Avoid These 4 Retirement Account Mistakes

    The top 4 mistakes investors should avoid in their retirement accounts.
  10. Investing

    Has Nepotism Ever Worked?

    It may very well be that hiring a relative is the right course of action for you. But before you do, carefully consider how hiring family could hurt your business.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!