Pension terms Flashcards
What is the defined-benefit pension plan?
A defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history
This type of plan is called “defined benefit” because employees and employers know the formula for calculating retirement benefits ahead of time, and they use it to define and set the benefit paid out.
( something like our pension )
What is annuity rate?
An annuity is a regular income paid to you for life and the annuity rate is the factor that determines how much annual income you get.
This rate depends on a range of things, including your age, state of health and even where you live. But most of all, it’s based on current market rates.
