Defined-Benefit Plan
An employer-sponsored retirement plan for which retirement benefits are based on a formula indicating the exact benefit that one can expect upon retiring. Investment risk and portfolio management are entirely under the control of the company. There are restrictions on when and how you can withdraw these funds without penalties.
Investopedia Commentary
This fund is different from many pension funds whose payout is somewhat dependent on the return of the invested funds. The payouts made to retiring employees participating in this defined-benefit plan are determined by factors such as salary history and the duration of employment.
Related Links
Introductory Tour through Retirement Plans
Keeping Track Of Your Assets
See also: Cash Balance Pension Plan, Defined-Contribution Plan, Pension Plan, Pension Shortfall, Superannuation, Target Benefit Plan