Service is used as the basis for which of the following in a plan?

In the context of a financial plan, "service" serves as a critical component for determining contributions. This is particularly relevant in retirement plans where an individual's length of service with an employer can dictate the amount of contributions made to their retirement account. The more years of service an employee has, the greater the potential for employer contributions, particularly in plans that match employee contributions based on tenure or that increase contributions as an incentive for longer service.

For instance, some employer-sponsored plans may increase matching contributions after employees reach specific service milestones. This creates a direct link between an employee's duration of service and the financial support they receive from their employer in the form of contributions to their retirement accounts.

In contrast, while eligibility, accrual of benefits, and vesting may also be related to service duration, they do not directly relate to the monetary contributions made to an employee’s plan. Eligibility pertains to who qualifies for the plan, accrual of benefits refers to how benefits grow over time, and vesting denotes the employee's right to retained benefits after leaving the company. These aspects are certainly essential but delineate different relationships where service is a factor rather than the direct basis for contributions.