Stock Market Investors » Glossary of Stock Terms » What is a Defined Benefit Plan?

What is a Defined Benefit Plan?

Generally, there are different types of retirement plans offered by employers. One of them is the so called defined benefit plan. If you select such a retirement plan the ultimate benefit will be in advance.

The benefit that you will get is usually determined by:

How many years the employee has been with the company
An average of the salaries of the employee over the past three years (the number of years varies from plan to plan).

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For knowledge we can highly recommend you subscribe to the The Wall Street Journal.

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