Defined Benefit vs Defined Contribution plan Basics
Pensions are detailed and most are governed by ERISA. EDL’s coverage of pension plans will only cover the difference between defined benefit and defined contributions plans. A defined benefit plan is determined by a formula which includes the number of years worked at the company. The formula also includes your salary and wages over the years worked too. Now a defined contribution plan is an account that the employer and sometimes the employee contributes a predetermined amount of funds. Please look into the details of your personal plan. Only the basic difference has been provided.