Accrual Rate Definition

Question - What Does The Term Accrual Rate Mean?

Answer - In a defined benefit/salary related pension scheme this is the rate at which pension benefits build up for each member. You will get a certain amount for each year of pensionable service. It is usually expressed as a fraction (eg 1/60th) or a percentage (eg 1.67%). In a final salary scheme you would get 1/60th of your final salary for each year of pensionable service as your first year's pension.

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