Flat Benefit Formula

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.

BREAKING DOWN 'Flat Benefit Formula'

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

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RELATED FAQS
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    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ... Read Answer >>
  2. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  3. What's the difference between a 401(k) and a pension plan?

    Discern the differences between 401(k) plans, in which employees assume the market risk, and pension plans, in which the ... Read Answer >>
  4. What incentives does an employer have in offering fringe benefits?

    Learn how offering fringe benefits is a powerful business tool for employers to attract and retain quality employees while ... Read Answer >>
  5. What is the difference between qualified and non-qualified plans?

    Qualified and non-qualified retirement plans are created by employers with the intent of benefiting employees. The Employee ... Read Answer >>
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