ALLOCATED BENEFITS

Allocated Benefit is a kind of payment that originates from a defined-benefit retirement plan. Once the insurance company has received its premiums, the allocated benefits are then passed (allocated) on to the plan participants. Allocated benefits provide a guaranteed retirement income to the plan participants that have the insurance carrier (and the PBGC) as its ultimate back-up.

The term may also refer to the payment's highest amount for a given service itemized in a contract.