What is a "Benefit Plan"?
by Ken Golliher, BOL Guru Guru BIOS
Question: We had a customer walk into our branch and ask to open a "Defined Benefit Plan." I researched on the Internet and found that it could be a 401K or some type of qualified plan. It is my understanding that it has to be handled by someone who is licensed in that area and that it would not be handled like an IRA or SEP.
Where can I get more information on this?
Answer: Defined benefit plans promise to pay participants or beneficiaries a specified amount that is generally based on a combination formula including number of service years, age at retirement, and final compensation. There is no investment risk with these plans nor do participant benefits include market investment returns.
The above was taken from a commercial Web site found using a Google search based on "defined benefit plan." If you are interested, you can find more information by resuming that search.
These plans require a qualified fiduciary, which would be limited to your trust department.
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