What is the participants “accrued benefit” under the defined benefit pension plan?
A-9: This refers to the amount of benefits that a participant has earned under a defined benefits pension plan as of any particular date and is usually stated in terms of a monthly pension annuity. It is generally based on the employee’s years of service with the company and his/her final average compensation as of the calculation date. A participant’s accrued benefit can be calculated at any point in time during his/her working career, based on the plan formula and components in effect at such time. However, regardless of when the accrued benefit is calculated, it generally represents the amount of the participant’s monthly pension annuity the he/she can receive on an “unreduced” basis at normal retirement age.
