Defined Benefit Pension Schemes

A Defined Benefit (DB) Pension Scheme is a type of retirement plan where an employer promises to pay employees a specific pension amount upon retirement, based on their salary and years of service. The employer is responsible for funding the scheme and managing investment risks, ensuring the promised benefits are available. Employees benefit from a predictable income after retiring, providing financial security. The scheme's funding needs are periodically reviewed to maintain promised levels, making it a reliable but complex pension arrangement that shifts investment risk from employees to employers.