Defined benefit plans specify the amount of benefit an employee will receive on retirement while defined contribution plans specify the amounts that employers and employees will (or can)contribute to an employee's plan.

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Defined benefit plans guarantee a specific retirement benefit while defined contribution plans only specify the amount that the employer and/or employee can contribute to the plan, and the ultimate benefit will be determined by the performance of the investments in the plan.

Defined Benefit Plans Specify the Amount of Benefit an Employee