Retirement plan in which a definite formula is used to calculate an eligible participant's pension benefit. This plan is typically provided by an employer and does not require an employee's contribution.
funded by the employer, and provide a benefit that is determined by a formula that is spelled out in the plan. Usually, it involves compensation and years of service. Generally, the longer someone works under the same defined benefit plan, the larger the retirement benefit.
A fund where benefits are related by a formula to final salary. (As opposed to defined contribution or accumulation funds.)
A defined benefit scheme is a type of occupational pension scheme, provided by an employer, where the retirement income promise is usually based on a final salary definition (usually your basic salary), typically multiplied by a fraction for each year you are a member of that scheme. For example, 1/60th of final salary per year. The amount that you and/or your employer contribute for you to receive this amount of pension income may change over a period of time. There is usually a minimum amount that you are required to contribute if you wish to join, in addition the employer will pay an additional amount which reflects the overall cost of providing the level of retirement income promised.
A defined benefit pension plan promises the participant a specific monthly benefit at retirement and may state this as an exact dollar amount.
A pension scheme where the pension is related to the member’s salary or some other value fixed in advance.
A defined benefit plan is an employer maintained plan that pays out a specific, pre-determined amount to retirees. Defined benefit plans are guaranteed by PBGC.
Employer-funded pension plan that pays employees who retire a set amount based on a certain number of years worked. A traditional pension plan.
A retirement plan in which the benefit is predetermined, also called a pension plan. For PERS Plan 2, the defined benefit equals 2 percent × SCY × AFC. For PERS Plan 3, the defined benefit equals 1 percent × SCY × AFC.
A defined benefit plan pays benefits based on a specific (defined) formula. The benefit is defined by the terms of the plan. In theory, what you "know" at a given point is the benefits due, based on that formula (though that may be easier said than done). Simplistically, it is what has traditionally been called a "pension" plan. The benefit is generally not expressed as a specific amount, but as a formula used to calculate that benefit. Typically, benefits paid will depend on three factors: age, service, and compensation. Benefits paid may be Social Security benefits, and may or may not be adjusted for subsequent cost-of-living adjustments, based on the terms of your plan. These plans consider years of service by the employee, generally providing greater benefits the longer an employee works for a particular employer.
Pension schemes which base their pension calculation on a defined formula, usually based on salary and service. Also called final salary schemes.
Type of occupational pension scheme, also known as a Final Salary Scheme. The value of the pension is guaranteed and is defined as a percentage of your final salary. If your employer does not have enough in the pension pot to issue your full pension, perhaps due to poorly performing investments, they have to make up the difference.
An occupational pension scheme where the final pension an employee receives is linked to the size of their final salary They are also referred to as Final Salary Schemes.
These schemes promise to pay the employee benefits at pension age which relate to their salary. Typically the scheme will purchase a pre defined pension at the retirement through an annuity.
