Defined-Benefit Plan

(redirected from Defined Benefit Pension Plans)

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.
References in periodicals archive ?
Benefits earned from these defined benefit pension plans through Dec.
said its latest Pension Funding Index (PFI), which consists of 100 of the nation's largest defined benefit pension plans, experienced a USD26 billion increase in pension liabilities and an USD18 billion increase in asset value, resulting in an USD8 billion increase in the pension funded status deficit.
Contributions to multiemployer defined benefit pension plans have been a mainstay, legacy feature of union negotiations in many industries.
Consequently, those who are interested in the sustainability of defined benefit pension plans administered through an agent multiple-employer pension plan have no choice but to turn to the individual employer's financial statements to obtain information on the net pension liability relevant to that employer.
Chrysler Group, a United States-based automaker, is planning to freeze its salaried employee defined benefit pension plans, effective December 31, 2014.
Relatively few employers (10%) offer both phased retirement and defined benefit pension plans.
Defined benefit pension plans entail high installation and administration costs, are complex to design, and are often difficult to understand.
Alaska Airlines has made a voluntary contribution of USD50m in cash to four defined benefit pension plans covering 7,300 employees in its airport, dispatch, maintenance, management and pilot work groups.
Over the years, the mill provided employees with defined benefit pension plans, something other woodland operators in the industry do not have.
Just 21 percent of workers in private industry are now covered by defined benefit pension plans, which prior generations counted on for a lifetime stream of income.
25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans; paragraphs 5 and 11 of GASB Statement No.
In 1978, 41 percent of private sector workers were covered by defined benefit pension plans.

Full browser ?