Defined benefits plan

In a defined benefits plan the payments you receive when the plan matures are defined. Defined benefit plans are rare these days because any company or organization that runs them will be taking on the risk that the benefits the plan is required to pay out in the future are higher than the funds available to it in the plan. This can happen if markets turn down more than expected. A company running such a defined benefits plan would have to draw on insurance or other sources of funds to make up any shortfall.

Share and Enjoy !