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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use