What Is A Defined Benefit Retirement Plan?

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May 29, 2013

Larry Gilmore

what is a defined benefit plan? A defined benefit plan is an employer sponsored retirement plan that the employer bares all the risk of investment. A defined benefit plan provides an outcome for employees rather than a lump sum balance subject to market risks. A defined benefit plan used to be the norm for retirement programs, now they are rare as many employers have jumped to 401(k) plans which only obligate the employer to the original contribution. The shift of RISK falls completely on the employee.

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