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DB pension plan basics

A defined benefit (DB) pension plan promises to pay you a certain amount of monthly retirement income for life.​​​​​

4 things to know about DB plans

  1. The amount of your pension is based on a formula that usually takes into account your earnings and years of service with your employer.
  2. In most plans, both you and your employer contribute.
  3. Your employer is responsible for investing the contributions to ensure there’s enough money to pay the future pensions for all plan members.
  4. If there’s a shortfall in the money needed, your employer must pay the difference.

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