Defined Benefit Pension Plans

Defined benefit pension plans are stated pension amounts that vary according to age, salary and years of service. These plans are funded partly by the employer and employee. They are deducted from paychecks. These plans clearly define a pension amount once you reach retirement age. Other plans work a little differently; their defined contribution plans vary depending on the amount of contributions that is paid by employees. Defined benefit pension plans are less popular than contribution plans because of the difficulty and costs of setting them up. According to the pension benefits guarantee corporation (PBGC), there are currently 38,000 benefit plans in existence today.