Defined Benefit Pension

A Defined Benefit (DB) pension is a retirement plan that guarantees you a specific income after you retire, based on factors like your salary and years of service. Employers manage the fund and promise to pay this predetermined amount, often continuing payments for life. The amount you receive is typically calculated using a formula involving your salary and how long you worked for the company. Because the employer bears the investment risk, they are responsible for ensuring there’s enough money to meet the promised benefits, providing retirees with predictable, stable income in retirement.