Pension arrangement that promises a specified retirement benefit, usually based on salary, service, and plan formula.
A defined-benefit pension plan is a pension plan that promises a specified retirement benefit rather than leaving the final retirement outcome entirely to an investment account balance.
The benefit is usually determined by a formula tied to salary history, years of service, and plan-specific accrual rules.
Defined-benefit plans matter because they shift more retirement-risk management onto the sponsor instead of the individual worker.
benefit levels are formula-based rather than purely market-based
funding discipline and actuarial assumptions become central
retirees often receive more predictable lifetime income
That predictability is why defined-benefit plans remain central in many public-sector and legacy employer retirement systems.
Pension Plan: Broader retirement-plan category that includes defined-benefit structures.
Pension: Income stream often generated by a defined-benefit plan.
Public Pension Funds: Large institutional pools often used to support defined-benefit obligations.
Retirement Benefits: Broader category of post-work benefits to which DB plans contribute.