defined benefit plan

defined benefit plan
de·fined benefit plan n: a pension plan in which the amount of benefits paid to an employee after retirement is fixed in advance in accordance with a formula given in the plan

Merriam-Webster’s Dictionary of Law. . 1996.

defined benefit plan
A type of pension plan that promises a specific benefit upon retirement. The benefit may be a set amount (such as $1,000 per month) or may be calculated according to a formula based on, for example, years of service and average salary. Compare: defined contribution plan
Category: Employment Law & HR → Employee Rights
Category: Employment Law & HR → Human Resources
Category: Personal Finance & Retirement → Money & Taxes for Retirees
Category: Personal Finance & Retirement → Retirement Planning

Nolo’s Plain-English Law Dictionary. . 2009.

defined benefit plan
USA
Also known as !!!pension plan. A qualified plan that provides a definite formula under which the amount of a participant's pension benefit is determined. In defined benefit plans, the employer bears the investment risk because its contributions are actuarially determined each year based on the benefit formula and factors that include:
• Compensation.
• Age and service of participants.
• Investment performance.
Benefits in most defined benefit plans are guaranteed by the Pension Benefit Guaranty Corporation up to a minimum level determined annually. Defined benefit plan sponsors are assessed an annual premium to fund the guaranty.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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