A company retirement plan, such as a pension plan, in which a retired employee...
A retirement pension plan that provides a specified level of benefits upon an employee's retirement, with the employer being responsible for funding the plan. Benefits usually are expressed as a function of an employee's years of service and average salary over the last few years of employment. Plan participants have no responsibility for the investment strategy, which is borne by the sponsor, who has sole discretion over the investment of plan assets. If asset values decline, it is the obligation of the sponsor to make additional contributions to the plan.
A retirement plan that links benefits to a formula that is generally based on the level of earnings and the length of service.
A type of pension plan under which benefits are determined by a specific benefit formula. The required annual deposits depend on the benefits to be provided and the number of years in the accumulation period. (See also: fixed benefit retirement plan.)
A type of pension plan where the employer determines the pension benefit (usually based on the employee's years of service and final salary with the employer).
See Pension Plan.
A type of retirement plan where the plan specifies the benefits that each employee will receive at retirement. The annual employer contribution is determined by the plan actuary.
An employer-sponsored retirement plan that promises to pay a specified amount to each employee who retires after a set number of years of service with the company. Generally the employer makes all contributions to such a plan, although employees do contribute to them in some cases. This is also referred to as a Defined Benefit Pension Plan or pension.
A pension plan under which the employee's retirement benefit is fixed or is determinable and is calculated per a formula â€“ for example, 50 percent of salary at retirement. The employer's contribution to the plan will vary from year to year to meet the pension funding requirements.
A retirement plan in which benefits are established but the contributions may vary. The defined benefit plan can be funded by a fixed annuity or a variable annuity.
A company retirement plan in which you expect to receive a fixed amount on a regular basis from your employer, i.e. a pension. The employer is responsible for investing.
A qualified retirement plan in which the employer will make contributions into the plan based on a specific formula that will yield sufficient assets to pay retirement benefits. The formula primarily considers years of service and the compensation level at the time of retirement.
A retirement plan that pays a specific benefit, usually based on a combination of age, service credit, and salary. TRS is a defined benefit plan. The plan bears the economic risk.
A pension plan that contains a formula for determining each worker’s pension benefits (based on such factors as annual earnings, length of service, and age of retirement). The employer is responsible for maintaining enough money in the pension fund to meet the plan’s obligations, usually the payment of a monthly annuity to the plan participant and survivor benefits to that participant’s spouse.
Type of retirement plan designed to provide a predetermined retirement benefit to employees or their beneficiaries, either in the form of a certain dollar amount or a specific percentage of compensation. The employee, the employer, or both may make contributions. Three basic types of defined-benefit plans, include: (1) Flat Benefit; (2) Unit Benefit; and (3) Variable Benefit Plans.
A retirement plan which provides a fixed or specific benefit to the employee at retirement. The benefit is often based on a percentage of income and years of service.
A retirement plan in which the employees' benefits... Add a comment
a company retirement plan in which both the employee and the employer contribute to the plan. Typically the plan is based on the employee's salary and number of years worked. Fixed benefits are outlined when the employee retires. The employer bears the investment risk and is committed to providing the benefits to the employee. Defined benefit plan managers can invest in private equity funds.
A retirement plan (like KPERS) that bases retirement benefits on a formula including age, years of service and final average salary. Benefits are guaranteed.
A retirement plan that provides a predetermined payment schedule without adjusting for inflation.
An employer-sponsored pension plan, in which the employer promises payout of a regular benefit at the employee's retirement.
An employee benefit plan that provides a specific, determinable benefit that is not contingent on employer profits. Example: A traditional pension plan.
A pension play in which the formula for computing benefits is stipulated in its provisions. Thus allowing the employee to determine prior to retirement how much his/her retirement income will be.
an employer-sponsored retirement plan that promises a predetermined benefit for plan participants at retirement
a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation
a pension plan where the employee receives a set amount of money when he/she retires
a pension plan which a pays a monthly benefit to the employee after retirement
a pension program that is paid for and maintained by the state, and offered to employees who retire from the state
a qualified plan that promises a participant monthly payments at retirement, usually based on the participant's salary and years of covered service
a retirement plan based upon a vested right to a specified monthly income
a retirement plan set up to pay a fixed annual amount to eligible employees during their retirement years
A retirement plan that calculates, at the time of retirement, the monthly or annual payments you will be receiving. This calculation is based on your salary and length of service.
actuarial gain (or loss) benchmark FY
A defined benefit plan promises you a specified monthly benefit at retirement. It may promise an exact dollar amount or use a formula that considers factors such as salary and years of service. Your employer or both you and your employer contribute to these plans.
A pension plan that specifies the benefits an employee will receive after retirement. Benefits typically are based on length of service and salary, and usually are funded by the employer on behalf of each plan participant.
A plan in which the company specifies the benefit the plan will deliver. Typically involves only company contributions; company bears the investment risk. (Examples: pension or cash balance plan).
A defined benefit plan provides a specific income for retired employees, either as a lump sum or as a pension, or lifetime annuity. The pension amount usually depends on the employee's age at retirement, final salary, and the number of years on the job.
A pension plan that promises employees a fixed annual pension benefit at retirement, based on years of service and compensation levels.
This type of pension plan defines the amount of benefits to be paid, generally based on a formula which includes years of service and final average compensation
An employer-sponsored retirement plan under which members are promised a continuing benefit at retirement if they meet certain age and/or service requirements. The benefit amount is determined by formula, normally based on the member’s earnings, length of service, and service value. Promised member benefits are prefunded by contributions and investment earnings. The plan sponsor (employer) must ensure that sufficient moneys are raised to pay all promised benefits to current and future retirees and their eligible beneficiaries.
A plan that promises to pay a specified amount to each person who retires after a specified number of years of service or under specified conditions. The investment risk under such a plan rests with the plan sponsor, since the sponsor must make up any underfunding (defined by ERISA and the Internal Revenue Code as any plan that is not an individual account plan).
The defined benefit plan guarantees a benefit of a pre-determined amount generally corresponding to a percentage of the salary multiplied by the credited years of service under the plan. Actuaries establish the cost of the benefits and determine the contributions that must be made to the plan. Example of a frequently used calculation method: 2% × number of years of service × five-year average salary
A plan which promises an employee a specific pension benefit upon retirement, usually paid as a lifetime annuity. The employer calculates the retirement benefit based on a formula that usually considers the employee's years of service, an average of the last 3-5 years' salary and a percentage multiplier. Funding comes from yearly employer contributions based upon actuarial calculations. The plans may also require or allow employee contributions. Because employer contributions are based upon estimates and projections, defined benefit plans can face the problem of under funding.
PSRS/PEERS administers a defined benefit retirement plan. Benefits are based on a set formula using years of service, age at retirement, and highest average salary for a three-year period.
The type of plan under which your benefit is "fixed." This means that your employer promises to pay you a certain amount after you retire. This amount is usually based on how many years you have worked for the company and how much you earned during that time.
A comprehensive retirement option offered by STRS Ohio that bases retirement income on a calculation that uses your age, years of service and final average salary. This is the retirement plan most members participate in, and is managed by STRS Ohio investment professionals. Members in this plan also have access to health care coverage, cost-of-living adjustments and death and supplemental benefits in retirement through STRS Ohio, as well as, survivor and disability benefits while teaching. For detailed plan information, click here.
A plan that is designed to provide participants with a definite benefit at retirement (i.e. a monthly benefit of 20% of compensation upon reaching age 65).
often a single annuity type of plan. Generally, with this kind of plan, there is no separate account in the name of the individual employee beneficiary. Instead, employers put aside benefits (money, stock) for a group of employees in the aggregate, with the individual employee-spouse entitled to share in the benefits after a period of time (vesting), whereafter, the plan's payment will be apportioned at a predetermined retirement date and paid in fixed sums (like an annuity) for the lifetime of the employee.
A retirement plan in which the benefits are defined and not based on the total contributions by member and employer. For the STRS Ohio Defined Benefit Plan, benefits are based on final average salary and years of service.
A DB plan is a pension, called defined-benefit because the payout to the worker is based on a defined formula upon retirement, either a percentage of earnings or a fixed dollar per month.
A traditional pension providing a guaranteed annual/monthly benefit based on a formula including factors such as years of service.
A plan which provides a predetermined benefit amount using a formula combining service credit and salary.
A retirement plan which provides benefits based on a set formula (e.g., UCRP).
A retirement plan that agrees to pay a specified amount to each retiree after so many years of service, or time at the company. Contributions grow tax-deferred and can by made by both employers and employees, or only the employer.
This kind of plan also may be referred to as a unit benefit plan. These terms refer to a plan in which employees are promised that upon retirement they will receive a specific amount of money according to a formula, which may be some calculation based on how long an employee worked for a company and how much he or she earned. See " Fixed benefit plan."
Defined Contribution Plan
a plan that pays benefits based on a specific (defined) formula. Typically, benefits paid will depend on three factors: age, years of service, and compensation.
Pension plan with specific employee benefits, often called ‘final salary scheme’.
A retirement plan in which the sponsoring company provides a certain guaranteed benefit to participants based on a pre-determined formula.
pension plan stating either (1) the benefits to be received by employees after retirement or (2) the method of determining such benefits. The employer's contributions under such a plan are actuarially determined.
a plan that is not an "individual account plan" under the law. A defined benefit plan has a definite formula by which the employee's benefits will be determined. In plans of this type, employer contributions are determined by actuaries.
Clearly defines, by its benefit formula, the amount of retirement income available at retirement.
Provides a specific and guaranteed retirement income, typically based on the number of years of employment, an average of the final few years of salary, and a percentage multiplier. This benefit is normally paid out as a monthly pension for life with a certain percentage payable to a surviving spouse after the death of the pensioner.
A retirement plan that promises a specific benefit at retirement usually defined in terms of such factors as salary and years of service.
A pension plan in which the sponsor agrees to make specified dollar payments to qualifying employees.
A company-sponsored pension plan that guarantees a certain level of pension income at retirement, calculated according to a pre-determined formula.
A qualified retirement plan under which a retiring employee will receive a guaranteed retirement fund, usually payable in installments. Annual contributions may be made to the plan by the employer at the level needed to fund the benefit. The annual contributions are limited to a specified amount, indexed for inflation.
Defined benefit plans are post-employment benefit plans other than defined contribution plans.
A retirement plan that promises to provide a specific benefit at retirement. The retirement benefits are determined by any of several different benefit formulas.
A plan designed to provide participants with a definite benefit at retirement (e.g., a monthly benefit of 50 percent of final average compensation upon reaching age 65). Contributions under the plan are determined by reference to the benefits provided.
A retirement plan that pays a specified amount to former employees, typically based on the number of years of employment and on the average salary in the years just before retirement. Commonly known as a pension, a defined benefit plan was the predominant way that workers secured their retirement funds prior to the widespread use of defined contribution plans.
A pension plan providing a benefit determined in advance with reference to various factors including level of earnings and length of employment.
In a defined benefit plan members' benefits are determined by a formula usually based on years of service times earnings, rather than by the investment returns made on their pension contributions.
A retirement plan that uses a formula (generally based on an employee's salary and length of service) to calculate an employee's retirement benefits and is not funded by employee contributions to the plan.
A pension plan that promises to pay employees a specified amount at retirement. The plan states either the benefits to be received by employees after retirement or the method of determining such benefits.
Traditional retirement plan that promises an employee-participant specific fixed future benefits determined according to a formula that usually depends on the employee's earnings, years of employment by the company, or both. Contributions are not preestablished since the amounts that will have to be contributed will vary depending on the returns realized on investments. Risk is borne by employers, not employees: if investment returns are too low to fund the payment of predetermined benefits, employers have to ante up the difference through higher plan contributions.
A tax-deferred pension plan in which the participants know in advance how much their benefit will be. The amount of the benefit is generally based on years of service and salary.
A type of qualified plan in which a participant's benefits are based on a formula stated in the plan document. Generally, the benefit combines years of service and compensation in a way that would yield a monthly payment to a participant at retirement.
A retirement plan that promises to pay a certain amount, usually based on the number of years of service and the average salary in the period before retirement. Employers generally bear all investment risk associated with these plans.
A defined benefit plan is designed to provide eligible participants with a specified benefit at retirement based upon a special formula. General and Safety member plans are designed to pay each member a lifetime benefit based upon a formula which includes the following three factors: • Member's age at retirement • Member's length of credited service • Member's final compensation
An employee benefit plan that provides determinable benefits not based on employer profits.
A pension plan that defines the pension benefit to be provided, based on years of plan membership, average earnings, etc., in accordance with the terms of the plan.
A traditional pension plan whereby an employer maintains an account for workers and promises a specified benefit upon retirement.
A retirement plan that uses a calculation (usually based on an employee's length of service, salary and age) to calculate an retirement benefits and is funded by employer.
Retirement plan in which a specific formula is used to determine an employee's future benefit. The plan provides a guaranteed level of benefits on retirement. Usually, the promised benefit is tied to the employee's earnings, length of service, or both.
A pension plan where the benefit payment is a definite, preset amount which may be based on length of service or calculated as a percentage of salary over the years.
See EMPLOYEE BENEFIT PLAN.
A Defined Benefit Plan is one that provides a specific pre-determinable amount of benefits to a participant at that individual's projected date of retirement. Normally, the benefits are based upon a formula that incorporates the participant's projected years of service and final average compensation. This type of plan is what most people consider a "traditional" pension plan. It is more often found in large companies than small companies.
A type of retirement plan that specifies how much in benefits it will pay out to a retiree.
A defined benefit plan otherwise known as a pension provides a specific benefit for retired employees, either as a lump sum or as income for the rest of their lives. Sometimes the employee's spouse receives the benefit for life as well. The pension amount usually depends on the employee's age at retirement, final salary, and the number of years on the job. All the details are spelled out in the plan. However, employers may replace these traditional retirement plans with defined contribution or cash balance plans.
A company-sponsored pension plan in which retirement benefits are usually determined by a formula based salary and years of service. In most cases, these plans are "contributory" because employees must make regular contributions. The alternative, in which the company pays the total bill, is "non-contributory".
A retirement plan under which pension benefits are fixed in advance by a formula based generally on years of service to the company multiplied by a specific percentage of wages, usually average earnings over that period or highest average earnings over the final years with the company.
An employer-funded retirement plan designed to pay a predetermined benefit based on an employee’s salary and service.