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What are defined-benefit pension plans?

Defined-benefit pension plans are qualified retirement plans that provide fixed and pre-established benefits to plan participants when they retire.

What is a defined benefit plan?

Defined benefit plans offer guaranteed salary-like payments and were historically offered in order to entice workers to stay with one company for years or even decades. Thanks to the rise of lower-cost defined contribution plans, defined benefit plans are much less prevalent today.

What are defined-benefit plans & defined-contribution plans?

Defined-benefit plans and defined-contribution plans are two retirement savings options. Defined-benefit plans, otherwise known as pension plans, place the burden on the employer to invest for their employees' retirement years and deliver a defined monthly amount once they retire. They are complicated and expensive plans to administer.

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