Home >  Term: defined benefit plan
defined benefit plan

Most common type of pension plan in which an employer sets aside specific sums of money (based on each employee's tenure of service, age, and salary) for qualifying employees, in a separate tax deferred account. It is 'defined' in the sense that the formula for computing the employer's contribution is known in advance. Also called career average benefit formula, career average formula, career earnings formula, or defined benefit pension plan.

0 0

Creator

© 2024 CSOFT International, Ltd.