A plan that contains a formula for determining retirement benefits is known as a ________.

Question

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A defined benefit pension plan is a retirement plan that outlines the specific formula for determining an employee's retirement benefits, typically based on factors such as years of service and salary. This is different from a defined contribution plan, such as a 401(k), where employees contribute a percentage of their salary and the employer may match a portion of that contribution, but the final retirement benefit is not predetermined. Employee stock ownership plans and cash balance plans are also defined contribution plans, not defined benefit plans.

A Plan That Contains a Formula for Determining Retirement Benefits