One way to structure an employee pension plan. It also could describe a very elaborate process for deciding who gets to eat the last piece of pizza.
In the pension sphere, the benefit allocation method is usually described in terms something like this: an employee gets a single "unit" of benefit for each "unit" of service. That's a little abstract to make much sense, so we'll break it down a bit.
A unit of service is typically a year, and a unit of benefit might be an annuity. Sometimes the amount getting contributed to the plan is decided using a percentage of the worker's salary. Other times, it's a fixed dollar amount.
In this method, benefits are directly tied to years of service (and sometimes size of salary). The benefits build up in increments over time, rather than the pension plan having a rule like "at 20 years of service, you get this...at 25 years of services, you get that."
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Finance: What is a Beneficiary?25 Views
Finance a la shmoop.. what is a beneficiary? well in Latin, bene is
good so this is like a good place to catch fish...well close not [Old man fishing in the ocean]
really but being a beneficiary is good it means you get stuff like if you are
the beneficiary of weird uncle Al's will then you get his odd collection of hair
balls shaped like US presidents and thirty two thousand two hundred sixty [Uncle Al's will appears]
$9.32... in essence then you are the beneficiary of his will you are the one
set up to benefit by the death of someone who wanted to favor you with
their assets when they had you know passed on to the great beyond where hair [Uncle Al with white wings in heaven]
balls will fall....
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