Defined benefit plan
Defined benefit plan is an employer-sponsored retirement plan in which employee benefits are paid based on a formula using factors such as salary and duration of employment. Usually there are restrictions on when and how the plans can be accessed without penalties. The amount of the retirement is fixed and the employee knows the amount.
Definitions
According to Labor Relations and Collective Bargaining by Michael R. Carrell and Christina Heavrin (10th edition),
- Defined benefit plan. An employer-sponsored retirement plan in which employee benefits are paid based on a formula using factors such as salary and duration of employment. Usually there are restrictions on when and how the plans can be accessed without penalties. The amount of the retirement is fixed and the employee knows the amount.
According to the HRBoK Guide,
- Defined benefit plan. A retirement plan with predetermined payments. A retirement plan that tells participants exactly how much money (lump sum or regular payments) they will receive on a specific later date (usually the day they retire).
Related concepts
- Labor relations. The systematic study of attitudes, motivations, and behaviors which two or more job-market actors assume toward each another.
