Defined Benefit Plans
Defined Benefit Plan | Definition
(1) A pension plan in which the sponsor agrees to make specified dollar payments to qualifying employees. The pension obligations are effectively the debt obligation of the plan sponsor.
(2) A retirement program that pays a fixed benefit based on age at retirement, years of service, and/or pre-retirement salary. In defined benefit plans, the benefit amount is determined in advance based on a benefit formula established by the plan sponsor. The formula is usually tied to the employee's earnings, length of service, or both. Although the benefit formula is clearly defined, the amount of yearly contribution necessary is estimated based on actuarial calculations.
For over 1,000 additional terms and definitions please see our Investment Glossary Guide.
Related to Defined Benefit Plans:
- Geographical Hedge Fund Guides
- Hedge Fund Employment Guide
- Financial Certification
- Investment Book
- Hedge Fund Terms and Definitions
Tags: Defined Benefit Plans, What are Defined Benefit Plans, Defined Benefit Plans Definition, What is a Defined Benefit Plan?
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.