What Is a Defined Benefit (DB) Plan?

A defined benefit retirement plan (or "DB plan") is one of two general types of qualified retirement plans. A qualified retirement plan is one that satisfies certain provisions of the Internal Revenue Code, and in return for doing so, enjoys certain tax benefits.  These tax benefits include deduction of contributions to the plan, exemption from tax for the investment earnings on plan investments and deferral of taxation to participating employees until benefits are distributed.

The other type of qualified retirement plan is called a defined contribution plan. Included in this plan type are 401(k) and profit sharing plans.