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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