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Accrued benefits

S

Snowy

Member
What does "accrued benefits" mean?
For instance, if benefits are revised, and the question says that accrued benefits are not allowed to change, what does this mean?
 
Accrued benefits simply means the benefits that have been built up to date.

Suppose a member joins a DB scheme with a 60ths accrual rate. After 5 years he will have built up a pension of 5/60 * FPS. If they then change the accrual rate to 80ths but no change is made to accrued benefits his benefits relating to those first 5 years will still be calculated as 5/60 *FPS and it is only the new benefits he builds up after this that will be on the 80ths accrual basis. So if he worked for another 7 years his pension would be calculated as (5/60 * FPS) + (7/80 * FPS)

Hope that helps!
 
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