A benefit-based pension plan is a type of retirement plan where the employer promises a specified monthly benefit on retirement, which is predetermined by a formula based on the employee's earnings history, tenure of service, and age.
A Pension Equity Plan (PEP) is a type of defined-benefit pension plan design in which a participant's benefit is stated as a lump sum based on the participant's age, service, and average pay, with the average pay usually based on only the final few years of employment.
Prior service cost refers to the obligations a company incurs for employee benefits under a pension plan related to service provided by the employee before a specific date.
Standard termination refers to the process by which a defined benefit pension plan is voluntarily ended by an employer following specific regulatory guidelines.
A vested benefit is a benefit which an employee possesses full entitlement to, and will retain under any circumstances. Vesting ensures that the employee will retain specific benefits such as pension entitlements or shares, typically after serving the company for a specified period. The vesting status impacts how entities account for obligations under defined-benefit pension schemes or employee share plans.
