There's no compounding in the Variable Benefit plan. They describe it as stacking pancakes. Each year you get a pancake, and it is worth a set number of "shares" based on how well the market did that year. When you're ready to retire, you take your stack of pancakes, count up your total "shares," multiply that number by the value of a share AT THAT MOMENT IN TIME, and that's your retirement benefit.


The potential for a bigger payout (comparing the proposed VB plan to the current DEFINED Benefit plan) in their examples comes largely from using the IRS limits as the Salary Cap and having NO Years of Service Cap.






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