Understanding Employee Benefits Terminology

Every week, Asinta brings you a short glossary of commonly, and sometimes uncommonly, used terms in the world of employee benefits.

Retirement Plans

Retirement plans are classified as either defined benefit or defined contribution plans. Defined benefit plans determine payments according to a fixed formula based on salary, years of service, and age. Defined contribution plans determine the value of individual accounts on the basis of the amount of money contributed and the rate of return on the money invested.