Talk:Defined benefit pension plan

Calculating the pension in salary averaging plans

The salary averaging in many plans including Canadian federal employee plans, uses current dollars. That is 5 different dollars are involved in 5 year averaging. This results in inflation during those years decreasing the cost and purchasing power of the pension. This effect can be eliminated by using constant dollars. Then inflation has no direct effect of cost nor purchasing power. This is an advantage to employer and employee.Art Campbell (talk) 15:30, 31 December 2011 (UTC)

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