The differences between a defined contribution plan and a defined benefit plan result in three key advantages of a defined benefit plan:
 

	Because it promises a benefit at retirement that is not a function of investment results, a defined benefit plan is the most efficient way to provide a guaranteed level of retirement benefit for employees.  The plan can be designed to manage the work force by encouraging early or later retirement, and the employer cost can be reduced by favorable investment returns.
	Because the IRS limits benefits, not contributions, and the plan promises benefits at a specific age, a defined benefit plan can provide for a much larger tax deduction and accumulation of retirement funds on a tax favored basis for the older business owner or key employee.
	If business conditions permit, investment losses can be “made up” through increased tax deductible contributions.