defined-benefit pension plan

Defined-Benefit Plan

A retirement plan in which the retiree receives a set amount in benefits each month once he/she begins receiving benefits. That is, the benefits the retiree receives are not dependent on the performance of the portfolio in which the contributions are invested; the company sponsoring the plan assumes the entire liability. The amount of the benefit is determined according to some formula that usually accounts for the amount of contributions and the length of time the retiree worked for the company. The disadvantage to a defined-benefit plan, from the company's perspective, is the possibility that the investment portfolio will not perform as expected, forcing the company to make payments from its earnings, or, worse, to borrow money. See also: Defined-contribution plan.

defined-benefit pension plan

A pension plan in which retirement benefits rather than contributions into the plan are specified. Thus, a retired employee who has reached a certain age with a given number of years of service and has earned a certain income is entitled to a specific monthly pension payment.
References in periodicals archive ?
The judge ruled in favor of the union's argument that its members are entitled to benefits because of the company's refusal to negotiate over a defined-benefit pension plan.
The USW beat back the potentially devastating effects of the cap on retirees by negotiating millions of dollars into a fund to cover retiree health care costs, and halted the company's drive for a two-tier system for new hires, who will remain on the same health care plan and participate in Alcoa's defined-benefit pension plan and not just a 401(k) plan.
It elected to close out its defined-benefit pension plan, which it did in 2004, and roll out a new defined-contribution plan; that started with new employees, then 60-90 days later with the rest of the employee base.
The estate's major asset was a defined-benefit pension plan.
REFLECTIONS: ERISA Section 204(h), as amended by the Economic Growth and Tax Relief Reconciliation Act of 2001, provides that a defined-benefit pension plan may not be amended to provide a significant reduction in the rate of future benefit accrual, unless the plan administrator provides notice describing the reduction to each individual whose benefit is adversely affected and to each employee organization representing these individuals; the plan is subject to an excise tax under Sec.
This may include knowing what optional forms of benefits are available under a plan's terms as well as devising an appropriate formula for dividing the benefits of a defined-benefit pension plan.
The most common form of this stealth compensation is an enhanced version of the traditional defined-benefit pension plan called a SERP (for supplemental executive retirement plan.
The Principal(R) was honored for its overall effort to create a positive working environment for Latinas and was specifically cited for its company paid defined-benefit pension plan, generous continuing education reimbursement program and alternative work policies.
NYSE:UNA) today announced that it had successfully completed a reversion of its defined-benefit pension plan yielding net proceeds of more than $100 million.
About half of the legislation deals with traditional defined-benefit pension plans, but other parts discuss the more popular defined-contribution plans and IRAs, which affect more taxpayers than do the traditional pension rules.
1 million American workers and retirees in 30,330 private single-employer and multi-employer defined-benefit pension plans.
Belt, spoke a week after Senate leaders broke an impasse over the legislation, allowing the House and Senate to begin talks on how to safeguard the promised benefits of millions of Americans with defined-benefit pension plans.