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Why is a benefit formula needed if I’m just going to take a lump sum at retirement?

April 26, 2017benefit Formula going I’m lump needed retirement

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Why is a benefit formula needed if I’m just going to take a lump sum at retirement?

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IRS rules require that the plan document define a lifetime annual benefit payable at retirement, and specify how it will be earned over a participant’s career. A formula is designed so that the desired level of savings (limited by IRS rules) is expected to result in sufficient assets to pay the benefit at retirement.