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A traditional defined benefit (DB) plan is a plan in which the benefit on retirement is determined by a set formula, rather than depending on investment returns. Government pensions such as Social Security in the United States are a type of defined benefit pension plan.
If you'd like a retirement plan that guarantees a specified benefit level at retirement regardless of investment. results, you may want to consider a defined benefit pension plan. A defined benefit plan is a qualified. employer-sponsored retirement plan that is funded solely by the employer (in most cases); it's the traditional type. of pension plan. A defined benefit pension plan allows the highest potential contribution amount of any plan.