Investment Jargon: Defined Benefit (DB) Pension

Defined Benefit (DB) Pension

Often called a “final salary” pension, this is a workplace pension that pays a guaranteed income in retirement, usually based on your salary and years of service, rather than depending on investment performance. The employer bears the investment risk and is responsible for paying the promised income, which is a big part of why DB schemes have become rare outside the public sector, they’re expensive for employers to run.