Defined-Benefit Plan
An employer-sponsored retirement plan where employee benefits are sorted out based on a formula using factors such as salary history and duration of employment. Investment risk and portfolio management are entirely under the control of the company. There are also restrictions on when and how you can withdraw these funds without penalties.
Also referred to as a "qualified benefit plan" or "non-qualified benefit plan". Investopedia Says:
This fund is different from many pension funds where payouts are somewhat dependent on the return of the invested funds. The payouts made to retiring employees participating in defined-benefit plans are determined by more personalized factors, like length of employment.
A tax-qualified benefit plan, shares the same characteristics of a defined-benefit plan, but also provides the beneficiary of the plan with added tax incentives. These tax incentives are not realized under non-qualified plans. Related Terms:
412(i) Plan
Beneficiary
Cash Balance Pension Plan
Defined-Contribution Plan
Liability Driven Investement - LDI
Other Post-Retirement Benefits
Pension Plan
Pension Shortfall
Superannuation
Target Benefit Plan |