Defined Benefit Pension Plans
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The
Employee Retirement Income Security Act (ERISA) covers two types of
pension plans: defined benefit plans and defined contribution plans.
A defined benefit plan promises a specified monthly benefit at
retirement. The plan may state this promised benefit as an exact dollar
amount, such as $100 per month at retirement. Or, more commonly, it may
calculate a benefit through a plan formula that considers such factors
as salary and service — for example, 1 percent of average salary for the
last 5 years of employment for every year of service with an employer.
The benefits in most traditional defined benefit plans are protected,
within certain limitations, by federal insurance provided through the
Pension Benefit Guaranty Corporation (PBGC).
If you are interested in installing a defined benefit pension plan
you should contact an actuary. Some of the best that we know
of are:
Warmus & Weber Actuarial Services Incorporated
- (412) 278-4830
JOHN S AGATSTON ACTUARIAL
SERVICES
235 ALPHA DR STE 204
PITTSBURGH PA 15238
Phone: 412-967-6240
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