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. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  4. Superannuation

    An organizational pension program created by a company for the ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Cash Balance Pension Plan

    A pension plan under which an employer credits a participant's ...
Related Articles
  1. Employee Benefits: How To Know What ...
    Personal Finance

    Employee Benefits: How To Know What ...

  2. Impact Of Continuing To Work In Retirement ...
    Retirement

    Impact Of Continuing To Work In Retirement ...

  3. The Economics of Hulu, Netflix, Redbox ...
    Investing News

    The Economics of Hulu, Netflix, Redbox ...

  4. Independent 401(K): A Top Retirement ...
    Retirement

    Independent 401(K): A Top Retirement ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center