Defined Benefit Plan
A defined benefit plan usually is a type of retirement plan that an employer establishes for its employees. Upon retirement, the employee receives a fixed annuity. The annuity typically makes biweekly or monthly payments to the employee for life. The annuity may also pay a survivor benefit to the employee’s spouse after the employee’s death. Under some plans (such as a cash balance pension plan), the employee can elect to cash out his or her interest in the plan and receive a lump-sum payment of the balance.