Defined Benefit Scheme

A Defined Benefit (DB) scheme is a type of retirement pension plan where your employer guarantees you a specific payout upon retirement, usually based on your salary and years of service. The employer manages the funds and is responsible for ensuring enough money is accumulated to pay your pension. Essentially, it offers predictable income in retirement, providing financial security. The scheme depends on pre-set formulas rather than investment performance, making it a reliable benefit for employees, but it also places the investment risk on the employer.