Unit Benefit Plan
A unit benefit plan provides retirement benefits based on the employee's compensation and how long he or she has been employed by the company. If an employee has 35 years of service, for example, with final average earnings of $120,000 and the unit benefit plan percentage is 2.0%, the employee's annual retirement benefit would be calculated as follows:
Years * average earnings * compensation percentage = annual retirement benefit.
Applying the above example to the calculation yields: 35 * 120,000 *.02 = $84,000
Investment dictionary. Academic. 2012.
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