COMPOSITE PLAN Meaning and
Definition
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A composite plan is a term used in the field of retirement benefits and pension management. It refers to a type of pension plan that combines elements of both defined benefit and defined contribution plans.
In a composite plan, employees receive a guaranteed retirement benefit based on a formula similar to that of a traditional defined benefit plan. This formula usually takes into account an employee's salary history and length of service. However, unlike a pure defined benefit plan, the benefit in a composite plan is not entirely guaranteed. Instead, it may include a variable component that is linked to the plan's investment performance. This means that the ultimate retirement benefit can fluctuate based on the returns of the plan's investments.
Composite plans are designed to address the challenges faced by traditional defined benefit and defined contribution plans. They provide employers with more predictable costs compared to a pure defined benefit plan, while still offering employees the security of a guaranteed benefit. At the same time, they also offer potential upside for employees, as the variable component can result in higher benefits if the plan's investments perform well.
Overall, a composite plan is an innovative retirement benefit structure that attempts to strike a balance between the advantages and disadvantages of both defined benefit and defined contribution plans.
Common Misspellings for COMPOSITE PLAN
- xomposite plan
- vomposite plan
- fomposite plan
- domposite plan
- cimposite plan
- ckmposite plan
- clmposite plan
- cpmposite plan
- c0mposite plan
- c9mposite plan
- conposite plan
- cokposite plan
- cojposite plan
- comoosite plan
- comlosite plan
- com-osite plan
- com0osite plan
- compisite plan
- compksite plan
- complsite plan
Etymology of COMPOSITE PLAN
The word "composite" originates from the Latin word "compositus", which is the past participle of the verb "componere", meaning "to put together" or "to arrange". The term "plan" comes from the Latin word "plānus", which means "flat" or "level".
In the context of "composite plan", the word "composite" refers to something that is made up of several distinct parts or elements. The term "plan" refers to a detailed proposal or scheme for achieving a particular goal. Therefore, a "composite plan" refers to a comprehensive or integrated plan that combines various elements or components in order to accomplish a specific objective or goal.
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