Pension Plan Funding: Individual Contract Pension Plan

Definition of "Pension plan funding: individual contract pension plan"

Retirement plan for an individual based on a single contract with a benefit based on current earnings, as if they will remain static until normal retirement age. As the earnings of the plan participant increase, additional contracts are purchased (with an increase in the contributions to the plan). The amount of retirement benefits depends on the benefit formula used and the investment experience of the company underwriting the plan.

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