A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employees earnings history, tenure of service, and age, rather than depending directly on individual investment returns. Here are some key features of a defined benefit pension plan:

• The employer/sponsor promises to pay the employees/members a specific benefit for life beginning at retirement. The benefit is calculated in advance using a formula based on age, earnings, and years of service.
• Defined benefit plans distribute their benefits through life annuities. In a life annuity, employees receive equal periodic benefit payments (monthly, quarterly, etc.) for the rest of their lives.
• Defined benefit plans are largely funded by employers, with retirement payouts based on a set formula that considers an employee’s salary, age, and tenure with the company.
• Unlike defined contribution plans like 401(k)s, defined benefit plans are usually funded entirely by employer contributions, although in rare cases employees may be required to make some contributions.
• Defined benefit plans offer guaranteed salary-like payments and were historically offered to entice workers to stay with one company for years or even decades.
• Defined benefit plans generally guarantee either a monthly payment or set lump-sum payout, depending on the plan.
• Defined benefit plans are becoming less common, despite the retirement certainty and security pension plans can offer.

In summary, a defined benefit pension plan is a type of retirement plan in which an employer promises a specified pension payment to employees based on their earnings history, tenure of service, and age. The plan is largely funded by the employer, and the retirement payouts are based on a set formula.