Retirement: Defined benefit plan vs. defined contribution plan
Simplistically, a defined benefit plan is an employer-funded pension in return for years of dedicated service, whereas a defined contribution plan is a much more portable plan funded by the employee and often supplemented by an “employer match” of a percentage of the employee’s contribution. While the former is a rapidly disappearing option, it is still available in some quarters and some employers are offering selected employees a choice between the two plans as they transition away from the defined benefit plan. If that is the case for you, then this Forbes article by Erik Carter will help explain the differences between these two options and assist in deciding which is the best for you. Click here to read more.