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Typically, an employee's account is credited each year with a pay credit (such as 3% of compensation from their employer). They'll also receive an interest credit for what's in the account (usually a fixed or variable rate linked to a benchmark such as the 30-year Treasury bond).

A defined benefit pension plan is a traditional pension. It is one that provides a specific and predictable benefit (or amount of income) at retirement. Essentially, a defined benefit plan offers guaranteed income for life. And because of this, DB pensions are often referred to as gold-plated or golden handcuffs.

CalSTRS Defined Benefit Program is a traditional defined benefit plan that provides retirement, survivor and disability benefits. Your Defined Benefit retirement benefit is based on a formula set by law using your age, service credit and final compensation.

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.

Defined benefit plans provide a fixed, pre-established benefit for employees at retirement. Employees often value the fixed benefit provided by this type of plan. On the employer side, businesses can generally contribute (and therefore deduct) more each year than in defined contribution plans.

As an option beneficiary payee, you may name a beneficiary, beneficiaries, or trust to receive, upon your death, any remaining contributions and unpaid accrued benefits in the retiree's account. Your beneficiary, beneficiaries or trust will not receive a monthly benefit. IMPORTANT FACTS.

The Defined Benefit Supplement is a hybrid cash balance plan for Defined Benefit members that provides additional savings for retirement. Funds come from compensation earned from service in one school year in excess of one year of service credit and limited-term salary increases.