abstract:A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers workers in lieu of increased pay.
Theywould also have hybridplans, with partof the traditionaldefined-benefitpensionreplaced by a defined-contributionplanof the sort common in the privatesector.
For pilots, it sponsors a defined-benefit pensionplan, a defined-contribution plan and gives access to a 401(k) that doesn't include any company match.
For those in Mr. Davis's shoes, other possible solutions include establishing a profit-sharing or defined-benefit pensionplan, or staying on the job as a salaried employee, consultant or paid chairman.
Union leaders said that they liked the look of the raise, but that what they really needed was a defined-benefit pensionplan, not the defined-contribution plan that management had offered them.