Defined Benefit Plan

A type of retirement plan where the employee will receive a specified benefit in an unknown amount at retirement. A pension is the most common example of a defined benefit plan. For many defined benefit plans, the payment is usually calculated as a percentage of their final salary, and the percentage used is usually related to years of service. No account is kept for the employee. Therefore, in most cases, at the time of divorce, the employee does not yet have anything more than an expectancy of a future payout. The Court can still order the employee to make a lump sum payout of the non-employee spouse at the time of divorce. Or the Court can announce how it will determine how it will divide the pension when the employee retires and reserve jurisdiction to actually divide the pension at that time.