Defined-Contribution Plan

See: Defined-Benefit Plan.

And then, after you have seen it, twist things around. That is, in a defined-contribution plan, a worker receiving a pension simply gets that amount invested in whatever investing vehicle that worker chooses. If the market does exceedingly well, or those investments do exceedingly well, then the worker benefits handsomely. Should those investments do poorly, then the worker suffers financially. In a defined-contribution plan, there is no investment result return guarantee. Think of a defined-contribution plan as a bicycle on the road, whereas a defined-benefit plan is a tricycle with training wheels driving inside Hot Wheel track.