Pension Plans – There are three basic types of registered employer-sponsored pension plans that are regulated by the government – Defined Benefit Plans, Defined Contribution Plans, and Hybrid Plans.

  • Defined Contribution Pension Plans the contribution to the plan is “defined”, not the benefit. There is no guarantee as to the amount of future benefits. The value of the Defined Contribution retirement income depends upon the accumulated contributions and the investment returns earned by these contributions.
  • Defined Benefit Pension Plans the pension benefit the plan member receives at retirement is determined or “defined” by a formula that is usually based upon his/her age, length of service, and salary. Defined Benefit Plans may be entirely funded by employer contributions, or by both an employer and employee contribution.