Defined benefit plan
A defined benefit plan is a retirement plan that is sponsored by an individual's employer. The employee's benefits are calculated by using a formula that accounts for factors such as salary history and duration of employment.
A defined benefit plan is different from many pensions because the investment risk and portfolio management is entirely operated by the company. Therefore, the payouts to retirees are determined by their own factors, like length of employment and not that returns of the company's investments.