Alternative Minimum Cost Method

Definition of "Alternative minimum cost method"

Greg & Isila Jimenez
Greg & Isila Jimenez Keller Williams Agusta Partners

Means of funding permitted under the employee retirement income security act of 1974 (ERISA). The administrator of a pension plan can comply with required minimum funding standards by electing an alternative cost method under which the normal cost is the lesser of the normal cost (1) according to the actuarial cost method of the plan, or (2) according to the accrued benefit cost method without benefit projections.

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