Is the word "pension" no longer interchangeable with "defined benefit plan"?

like when a company says they offer a "pension" these days.... do they often mean a "cash-balance" plan similar to a 401k? like the word "pension" no longer means what it used to?


Technically, a pension is a defined benefit plan. That said, misusing terms has become common and even the shrinking number of companies that still have such plans for some current employees have mostly moved to defined contribution plans for new employees. If you are considering new employment, I recommend asking HOW whatever plan they offer works. With the exception of unions, I am not aware of anywhere a defined benefit retirement plan is still offered.


In some companies it still means the same thing, but if you are applying for a job, you would want to ask that in the interview to make sure. Most companies have moved away from pensions because they get more money from a 401(k).

Alvin Colmes

No, but most companies do not offer a pension anymore. LOL

A Hunch

No. A Pension is a defined benefit plan A 401K is a defined contribution plan When someone says the word "pension" it means a defined benefit plan


It means what they mean it to mean. Some use 'pension' to refer to a 401K match, even though that's a real loose use of the word. There are still some places that offer traditional pensions, but not many.