Participation in a defined benefit plan can help you meet your income-replacement goals. It promises reliable, lifetime income from a benefit you can never outlive.
A defined benefit plan is a traditional type of pension plan that pays benefits according to a formula based upon factors such as wages, service and age.
You are entitled to a lifetime monthly benefit from a defined benefit plan.
The benefit you receive in a defined benefit plan is not dependent on investment performance. You will receive the benefit promised by the Plan’s formula regardless of the investment return and volatility of the financial markets.
The assets of a defined benefit plan are managed by fiduciaries for the benefit of all participants.
Your benefit in a defined benefit plan is safeguarded (within limits) by the Pension Benefit Guaranty Corporation, a federal agency that insures pension plans.
If you are considering employment with an employer that maintains a defined benefit plan, please contact the employer’s human resources department for additional details about its defined benefit plan.
If you are a financial advisor working with an individual who participates in a defined benefit plan, you likely are well aware of the tremendous advantages offered by such a plan. You also likely know that the specific value of a benefit depends upon several specific plan features, such as the benefit accrual rate (or benefit multiplier), early retirement subsidies, post-normal retirement date actuarial increases, and actuarial equivalence assumptions. If you would like additional information about those features for a particular plan, please contact United Benefits Group.
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