In a flat amount formula, what does the benefit depend on?

In a flat amount formula for retirement benefits, the benefit is determined by a fixed dollar amount that does not vary based on the employee’s salary, years of service, or any other factors. This type of formula provides a straightforward and predictable benefit, ensuring that every qualifying employee receives the same set dollar benefit upon retirement.

The focus in a flat amount formula is solely on the predetermined dollar figure, making it simple for both employers and employees to understand and plan around. For instance, if a plan states that retirees are entitled to $1,000 per month, then that will be the benefit amount regardless of how long the employee worked for the company or their salary during their employment.

Other options mention factors like salary or years of service, which do not relate to a flat amount formula. This sets the flat amount approach apart from more complex benefit calculations that might use varying factors. Thus, the correct answer effectively highlights the straightforward nature of the benefits in this type of formula.