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What is a defined benefit plan?

A defined benefit plan is an employer-sponsored retirement plan that provides qualifying employees with a guaranteed payout in retirement. It's an alternative to a defined contribution plan, which gives employees more control over account contributions but requires them to take on more risk and doesn't provide a guarantee of a certain payout.

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 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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