What is TARGET BENEFIT PLAN? What does TARGET BENEFIT PLAN mean? TARGET BENEFIT PLAN mean?

320 views
 

What is TARGET BENEFIT PLAN? What does TARGET BENEFIT PLAN mean? TARGET BENEFIT PLAN mean? TARGET BENEFIT PLAN meaning - TARGET BENEFIT PLAN definition - TARGET BENEFIT PLAN explanation.

Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.

A target benefit plan is a type of pension plan that is similar to a defined contribution plan in that it involves fixed contributions, or a fixed range of contributions, which are set independently of a plan’s funded position. Benefits are based on affordability projections. Plan members share plan risk through adjustments to their benefits.

A key element of the target benefit model is the existence of pre-determined guidelines linking benefits to funds available in the plan. Benefits and contributions are linked in a way that does not exist with traditional defined benefit or defined contribution plans.

Target benefit plans are similar to defined benefit plans in that the annual contribution is d...

Topics:  Society