Defined Benefit Plan FAQs What is a Defined Benefit Plan? A Defined Benefit Plan is a retirement plan that provides employees with a predetermined monthly income after they retire. What are the benefits of a Defined Benefit Plan? There are many benefits to having a DBP. Some benefits include: a guaranteed monthly income in retirement, attracting and retaining top talent, and employers are not responsible for all payouts if an employee leaves before retirement. What are the drawbacks of a Defined Benefit Plan? Some drawbacks include: employees are often stuck in their job until they reach the payout age, employees must make sure to start early and contribute consistently in order to save enough for retirement. Why do employers offer a Defined Benefit Plan to their employees? It offers security in knowing exactly how much money will be received upon retirement, while also helping employers attract and retain talented employees. How can an employee contribute to their own retirement account with the help of a Defined Benefit Plan? Employees can contribute to their DBP by setting aside money from each paycheck. They can also contribute employer matching funds, which is free money that will double your contributions. About the Author True Tamplin, BSc, CEPF® Facebook Linkedin Instagram Twitter Youtube True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists. True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.