What Is a Defined Benefit Pension?
The term shows up everywhere on this roadmap without ever getting its own definition. Here's the one distinction that actually matters — what's "defined" isn't what you might assume.
💬 GLP Retirement MinuteThe payout is fixed by a formula, set in advance — FAC × factor × years. Your eventual monthly check doesn't move with the stock market. The investment risk sits with the pension fund, not with you.
The contribution going in is fixed (a percentage of pay), but the eventual balance and payout depend entirely on investment performance. The risk sits with you, the account holder.
People sometimes assume "defined benefit" means your contribution is fixed. It's the opposite — your outcome is fixed, and the fund absorbs the investment risk to deliver it. That guarantee is exactly what backs the promise discussed on Is My Pension Guaranteed?
Basic and MIP members are entirely Defined Benefit. Pension Plus and Pension Plus 2 members have both — a smaller DB slice plus a real DC account. DC Plan members have no DB component at all. See What Are the MPSERS Benefit Structures? for the full reference.
"Defined benefit" is a promise about the destination, not the journey — however the fund's investments perform along the way, your formula-based outcome doesn't change. That's the entire reason this structure exists, and the entire reason it's worth more than most people initially assume.