When you retire, you may have a defined benefit plan (DBP) or a defined contribution plan (DCP).
A Defined Benefit Plan is a retirement plan in which an employer promises a set benefit amount to a worker, usually when the worker retires. The worker and the employer each contribute money to the Defined Benefit Plan. When the worker retires, the Defined Benefit Plan pays the
worker the promised benefit amount, usually a set percentage of the worker's final salary.
A Defined Contribution Plan is a retirement plan in which an employer promises a set amount of money to a worker, usually when the worker retires. The worker and the employer each contribute money to the Defined Contribution Plan. When the worker retires, the Defined Contribution Plan pays the worker the promised amount, usually a set percentage of the worker's final salary.