In a defined benefit plan, the employer promises workers a specified level of income upon retirement.
"I never assumed I'd have a pension, " says Friend, who is a defined benefit plan actuary.
Review benefit options if your spouse had e.g. a defined benefit plan at work.
If you are fortunate enough to be a participant in a defined benefit plan, the same logic applies.
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This is based on faulty actuarial methodology that speeds up pension contributions when a defined benefit plan is closed.
But just because a company has frozen or cut its defined benefit plan doesn't mean it is leaving workers to fend entirely for themselves.
In fact, it's a lot fairer than the funding formula in a traditional defined benefit plan, argues Urban Institute retirement and tax policy expert Eugene Steuerle .
Therefore, in order to enable it to offer a defined benefit plan similar to the current one, we require the fund to enter into an agreement with the Treasury.
If all your earnings are from your own business and you have lots of income to shelter, consider setting up a solo 401(k) as well as a defined benefit plan.
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With a defined benefit plan, the employer put money aside for you in a safe place and, based on your pay and years of service, you were entitled to a pension upon retirement.
Meanwhile, those cashing out of a defined benefit plan are signing up with planners and brokers, seeking advice on decisions like whether it is better to take a lump sum or an annuity payout.
The 401(k) plan accelerated in 1986, when Congress passed legislation permitting the replacement of the defined-benefit plan offered to government workers with a less attractive defined-benefit plan and an attractive defined-contribution plan.
This shift is nearly complete in the private sector: As of March 2009, 84% of state and local government employees had access to a defined benefit plan, compared to just 21% of private employees (and 16% of nonunion private employees).
To make this move, you have to work for a company that offers both a 401(k) defined contribution plan and a traditional defined benefit pension plan, and offers the option to roll assets from the former (the DC plan) to the latter (the DB pension).
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Various studies by benefits consultant Hewitt Associates show that only 38% of U.S. employers plan to offer a defined-benefit plan by the end of 2006, compared to as many as 83% in 1990.
Various studies by benefits consultant Hewitt Associates (nyse: HEW - news - people ) show that only 38% of U.S. employers plan to offer a defined-benefit plan by the end of 2006, compared to as many as 83% in 1990.
Ultimately, the sides settled upon a plan proposed by the NFL, wherein the current officials will retain the defined benefit pension plan until 2016, or until the official earns 20 years of service.
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Once upon a time the traditional defined benefit pension plan was a powerful means to lock employees in.
If you have younger employees, a custom-designed defined-benefit plan will allow you to put away big bucks for yourself, and little for them.
Workers Wayne Tomlinson, Alice Ballesteros and Gary Muckelroy brought the suit in 2004, arguing that by switching its defined benefit pension plan from a final average pay formula to a cash balance formula, El Paso set payments for older, longer-service employees at significantly lower levels.
For pilots, it sponsors a defined-benefit pension plan, a defined-contribution plan and gives access to a 401(k) that doesn't include any company match.
Union leaders said that they liked the look of the raise, but that what they really needed was a defined-benefit pension plan, not the defined-contribution plan that management had offered them.
You can be protected by receiving a core level of defined benefit and can plan your retirement with the knowledge of this safety net.
For those in Mr. Davis's shoes, other possible solutions include establishing a profit-sharing or defined-benefit pension plan, or staying on the job as a salaried employee, consultant or paid chairman.
One product was a qualified, single-employer defined-benefit pension plan.
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Swooning stockmarkets are a particular headache for British fund managers, who have had too much invested in equities for too long, which is where many of their recent problems arise, and why almost every defined-benefit pension plan is now in trouble.
Which meant big shoes to fill for his three sons, who were without the benefit of a clearly defined succession plan.
The unsustainability is due to several factors, but the biggest problem is that Medicare is a defined-benefit, social-insurance plan, with a growing number of recipients especially as the baby boomers enter retirement and a declining number of working stiffs to support it.
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