DB(k) Plan

DEFINITION of 'DB(k) Plan'

A retirement plan that combines some of the characteristics of a 401(k) plan with those of a defined benefit (DB) plan. Funds can be voluntarily contributed to the DB(k) plan just as they can with a 401(k) plan, with the employer retaining the option to match the funds up to a certain percentage. Upon retirement, the employer will also pay the employee a small percentage of his or her salary, which is similar to a traditional pension.


The DB(k) plan was included in the Pension Protection Act of 2006.

BREAKING DOWN 'DB(k) Plan'

The DB(k) plan was designed to provide businesses with a way to attract employees, since many investors worry that their entire savings could be wiped out in a down market. Retaining the pension characteristic means that the retiree will still have a source of income, regardless of the performance of the 401(k) portion of the plan.

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RELATED FAQS
  1. What is the difference between a DB(k) plan and a 401(k)?

    Learn the differences between a traditional 401(k) plan and a DB(k) plan. The hybrid DB(k) can provide a guaranteed income ... Read Answer >>
  2. What is the difference between a DB(k) plan and a defined benefit plan?

    Learn the differences between a traditional defined-benefit plan and the emerging DB(k) plan to see how employer-sponsored ... Read Answer >>
  3. How are DB(k) plans set up?

    Learn how to establish a DB(k) plan. This hybrid qualified retirement plan can actually be easier to establish than other ... Read Answer >>
  4. What's the difference between a 401(k) and a pension plan?

    Discern the differences between 401(k) plans, in which employees assume the market risk, and pension plans, in which the ... Read Answer >>
  5. How does an employer benefit from a 401(k) matching plan?

    A 401(k) is a type of qualified retirement plan created by employers, where an employee deposits money into a retirement ... Read Answer >>
  6. When is a Roth 401(k) better than a traditional 401(k)?

    Learn the difference between Roth IRA plans, traditional 401(k) plans and Roth 401(k) plans, and when a Roth 401(k) is better ... Read Answer >>
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