Investor Glossary-defined benefit planInvestor Glossary-defined benefit planInvestor Glossary-defined benefit planInvestor Glossary-defined benefit planInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Defined Benefit Plan

The HTML to link to this page
 

A defined benefit plan is a type of qualified retirement plan, meaning it receives favorable tax treatment. A defined benefit plan is employer sponsored, and the employer can deduct contributions made to the defined benefit plan. The employer contributes to the defined benefit plan based on a specific formula indicating the exact benefit an employee can expect upon retiring.
Once the employee retires, a defined benefit plan promises to pay the employee a specific amount yearly. The benefit payment under a defined benefit plan is usually based on the employee's age, years of service and salary history. With a defined benefit plan, investment risk and portfolio management are under the company's control. A defined benefit plan differs from many pension funds, whose payout depends to some extent on the return of the invested monies. Older employees who have worked many years for a company often prefer to be compensated for their services through a defined benefit plan.



Rate this defined benefit plan definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, in escrow, command economy, class C shares, ex-dividend date, limit order, balance sheet, LIBOR, implied volatility, required rate of return, stock market close, APR, margin rate, Zero Cost Collar, phantom income, 1035 exchange, retained earnings, inflation, diluted share, VIX, real GDP, annual return, current ratio, dividends payable, risk management, quality assurance, FTSE, EBITDA, irrevocable trust, deferred revenue, stock split, deferred tax, FICO score, reverse mortgage, option premium, wholly-owned subsidiary, average price per share, debt service coverage, 1031 exchange, cancelled check, minority interest, liquidity ratio, 401a, 144a, covered put, Key Rate Duration, ex-dividend, open position, per diem


Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use