Defined Benefit
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| Retirement Planning |
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| Tax Deferred and Tax Free Savings Plans |
| Pension Plans |
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| Government Retirement Benefits |
| Retirement Planning |
A defined benefit plan guarantees a certain payout at retirement. The investment risk is borne by the plan not the beneficiary.
Contents |
Origins
Defined benefit (DB) plans can be traced to the 19th century in Canada. The federal government created a "pay-as-you-go" plan for civil servants in 1870. While their share of Registered Retirement Plans (RPPs) is declining, DB plans still cover 84% of RPP members. However, RPPs have never covered more than 50% of the working population.[1]
The Canada Pension Plan is an example of a defined-benefit plan.
Types of Payout
Tax Deductibility
Commuted Values
Solvency
Bankruptcy
References
- ↑ Association of Canadian Pension Management, Delivering the Potential of DC Retirement Savings Plans, May 2008, p. 6.
