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...