Defined-Benefit Plan

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Also found in: Acronyms.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Contributions to multiemployer defined benefit pension plans have been a mainstay, legacy feature of union negotiations in many industries.
To many, the GE case embodies all that is wrong with accounting for defined benefit pension plans. GE reports a $2 billion dollar increase in income due to its pension plan, despite the fact that plan assets have lost more than 5% of their value.
A pay-related, defined benefit pension plan specifies a determinable pension benefit for retirees based on age, years of service, and salary.
Nearly 30 percent of uniformed employees who participated in a defined benefit pension plan had a terminal earnings formula flat rate of 2.5 percent of earnings or higher.
Summary of Cumulative Prediction Errors (in Percent) for the Sample of 137 Overfunded Defined Benefit Pension Plan Termination Events: 1975-1986.
is the infrastructure management arm of OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada.
23%: The percentage of North American defined benefit pension plan professionals who consider transferring plan liabilities to a third-party insurer this year.
Said to include wage increases, improvements to benefits and maintenance of the defined benefit pension plan for current Air Canada workers, the agreement does not included defined benefit pension plan for new hires.
Under the defined benefit pension plan the employer guarantees a specified benefit at "normal retirement age." Based upon actuarial calculations the employer is required to maintain a level of "minimum funding" such as will assure that funds will be available to pay this guaranteed retirement benefit.
The bankrupt carrier received permission to terminate its pilot defined benefit pension plan in September.
Instead of a defined benefit pension plan where employees know what they get when they retire, the company is developing a time contribution plan.
R and J each maintained a defined benefit pension plan for their hourly workers; those plans were the products of collective bargaining with the steelworkers' union.

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