Definitions for "Normal cost"
In insurance, the current year's premium based on the level annual premium. In retirement and qualified pension plans, the deposit requirement, based upon the date the participant first became, or the date he or she would have become, eligible to participate.
The actuarially determined amount needed to fund for one plan year the retirement benefits of a pension plan participant or of a pension plan as a whole. A plan's normal cost is dependent on the actuarial funding method and assumptions used by the plan.----------[ Back
The annual cost of funding current service benefits under a pension plan.