In a defined benefit plan, the employer bears the investment risk. This means that good returns lower the employer’s cost and bad returns increase it.  The employee’s benefit is not affected.  In a defined contribution plan, employees bear the investment risk.  Good returns increase their accounts and bad returns decrease them.  The employer’s cost is not affected.
	The IRS limits both types of plans.  For a defined benefit plan, the limit applies to the benefit paid out.  For a defined contribution plan, the limit applies to the contribution going in.
	Benefits in a defined benefit plan may be insured by a government agency called the Pension Benefit Guaranty Corporation (PBGC). If a business goes bankrupt, the PBGC will cover unfunded benefits for participants of covered plans. Plans that are covered pay annual premiums to the PBGC.
	Defined benefit plans are subject to minimum funding requirements while most defined contribution plans are not.  However, these requirements are NOT beyond the plan sponsor's control.   See myths about defined benefit plans.