I will keep it as simple as possible –

For example given that an employee works for a certain company and he/she accumulates their retirement benefits to maturity which usually occurs any period between at least 3 to 5 years of continuous employment with the same employer.

The employee’s Compensation Pension Credit is calculated and accumulated quarterly by a straight and simple calculation as stated below. A chart is use to derive the Compensation Credit Percent which is use to multiply by the Current Accrued Pension Balance before adding it to the current pension balance to derive the New Quarterly Pension Balance.

Total Points (Age plus years of Credited Service)	Compensation Credit Percent
25 – 34	2%
35 – 44	3%
45 – 54	4%
55 – 64	5%
65 – 74	6%
75 – 84	7%
85 upwards	8%

 

Example per Quarter
	1st Qrt	2nd Qrt	3rd Qrt	4th Qrt
Employee’s Age	31	31	31	31
Current Pension Balance	$              30,000.00	$     30,900.00	$      31,827.00	$       32,781.81
Years of Service Credited Service	5	5	5	5
Another Employee’s Years of Service Credited Service	5	5	5	5
Total Points (Age plus years of Credited Service)	36	36	36	36
Compensation Credit Percent	3%	3%	3%	3%
Compensation Credit Added to your Account Quarterly	$                    900.00	$           927.00	$            954.81	$             983.45	This amount is calculated by multiplying Current Pension Balance to Compensation Credit Percent Quarterly.
New Calculated Current Pension Balance Reported Quarterly	$              30,900.00	$     31,827.00	$      32,781.81	$       33,765.26	This value is derive by Adding Current Pension Balance to Compensation Credit added to your Account quarterly
Y-T-D (Annual Pension Balance)	$              30,900.00	$     31,827.00	$      32,781.81	$       33,765.26

 

 
See other examples.