By Matthew Makowski A defined contribution plan is one of two types of retirement plans covered by the Employee Retirement Income Security Act. The other type is a defined benefit plan. In order to understand either, it’s helpful to know the key differences.
A defined benefit plan promises a specified amount to be paid out at retirement. This can take place in the form of a lump sum, a single-life annuity, or a qualified joint and survivor annuity. This is called a defined benefit plan, because the benefit to be paid out is defined before retirement. It is usually based on a formula. The …read more
