defined benefits

Defined benefits refers to a type of retirement plan in which an employer promises employees a specific, predetermined payout upon retirement, typically calculated based on factors like salary history and years of service.

Unlike defined contribution plans, where the employee bears investment risk, defined benefits plans guarantee a particular amount regardless of market performance.

These traditional pension plans have become increasingly rare in the private sector, though they remain common in government employment.

Her defined benefits pension guarantees 60% of her final salary.