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Defined Benefit Plan
A defined benefit plan is a type of retirement or pension plan arranged and managed by the employer. Upon retirement, employees get regular payments to support their cost of living; they may also opt for a lump-sum payout. Some defined benefit plans allow spouses to pool their pension funds. Employers can often claim tax deductions on this type of pension plan. Businesses of all sizes, even small startups, can set up defined benefit plans for their employees.
What Small and Midsize Businesses Need to Know About Defined Benefit Plan
SMBs should opt to provide a defined benefit plan to their employees, as it can help them attract qualified talent looking for employers that offer highly competitive benefits packages. Nowadays, employees prefer organizations that offer this type of plan, as the benefits are fixed and predictable.
Related terms
- Absence Management
- Furlough
- Onboarding
- Attrition
- Right to Work
- Employee Self-Service (ESS)
- Background Check
- Equity Theory
- Performance Management
- Diversity and Inclusion (D&I)
- Gamification
- Center of Excellence (COE)
- Succession Planning and Management
- Workforce Analytics
- Performance Improvement Plan (PIP)
- Employee Resource Group (ERG)
- Chief Human Resources Officer (CHRO)
- 9-Box Model
- Enterprise Applications
- People Analytics
