Defined Benefit Plans

   A defined benefit plan is any retirement plan that is not a defined contribution plan. Under a defined benefit plan, retirement benefits must be definitely determinable (e.g., a proposed monthly pension for life equal to 30% of monthly compensation).

• A plan formula is geared to retirement benefits
• The annual contribution is usually actuarially determined
• Certain benefits may be insured by the Pension Benefit Guaranty Corporation
• Early termination of the plan is subject to special rules
• Forfeitures reduce the employer's cost of providing retirement benefits.