Rita went to work for a manufacturing company.The company offers a defined-benefit pension plan.The benefit at retirement is equal to 1.5 percent multiplied by years of service with the company,with the result multiplied by average salary in the three highest consecutive years of paid employment with the company.The benefit formula used at Rita's company is a

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The benefit formula used at Rita's company is a unit-benefit formula, which means the benefit received is dependent on the amount of years worked and the average salary over the last three years of employment. This is different from a flat dollar amount or percentage of earnings, which would not take years of service into account.

Rita Went to Work for a Manufacturing Company