Accrued Benefit Cost Method
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Accrued Benefit Cost Method
Actuarial method of crediting retirement benefits earned and the costs associated with these earned retirement benefits. An increment (unit) of benefit is credited for each year of recognized service that an employee has earned. Then the present value of these benefits (including the employee’s life expectancy) is calculated and assigned to the year earned. The benefit earned by the employee can take the form of a flat dollar amount or a percentage of compensation. For example, this may work out to 1.5 % of an employee’s compensation being credited to the employee’s account for each year of recognized service.
| Accrue, Accredited Advisor in Insurance (AAI), Accounts Receivable Insurance | |
| Accrued Interest, Accumulated Amount, Accumulated Value |
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Accrued Benefit Cost Method
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Barron's Insurance Dictionary
Dictionary of Insurance Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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