Retirement Benefit Plan

RetirementBenefit Plan

RetirementBenefit Plan

A)&nbsp&nbsp&nbspAt the appropriate retirement age, are you eligible for any pensionpay out?

Adefined benefit plan entails a pension plan in which the employerspecifies or promises a certain monthly benefit on retirement whichis determined by a formula founded on employee’s tenure of service,age, and earning history (Easterday &amp Eaton, 2012). If I leave myjob after 15 years of service before completing the stipulated 20years tenure, I am still eligible for the benefit. Incrementalvesting in a benefit plan means that, the plan is meant to beincreased by a given amount after a specified time. For instance, ifthe incremental vesting was after 20 years, then every five yearsthere is a certain amount that as an employee am entitled to even ifI do not finish my term.

B)&nbsp&nbsp&nbspWhat percent of the total accrued benefit would you be eligible for?

Incrementalvesting stipulates that, the benefit plan is subdivided intodifferent segments distributed within the 20 years tenure provided bythe plan (Easterday &amp Eaton, 2012). It therefore means that, if Ihad served for the 20 years tenure as stipulated by the plan, I wouldbenefit from 100 percent of the plan. This means that every fiveyears, I had earned 25 percent of the incrementally vested plan.Thus, since I intend to leave the company after 15 years of service,I will still be legible for 75 percent of the benefit upon attainmentof the legal retirement age. This is because I will have earned threetimes the incremental vested benefit which is 25 percent every fiveyears for three years which amounts to 75 percent.


Easterday,K. E., &amp Eaton, T. V. (2012). Defined Benefit Pension Plans. TheCPA Journal,82(9),22.