What is a defined benefit super fund?

Defined benefit super funds are the traditional funds and accumulation funds are their younger siblings. But being an older type of super fund doesn’t mean a defined benefit fund is outdated. In fact, in many ways they offer their members a much better deal than the newer style accumulation funds.

What are defined benefit funds?

In a defined benefit (DB) super fund, a formula determines your retirement benefit, rather than an investment return. According to financial regulator ASIC’s Moneysmart website, most super funds of this type are corporate or public sector funds, with many now closed to new members.

What is a defined benefit pension plan?

“A defined benefit plan is a type of pension plan that is fully funded by employer contributions and is a promise to pay benefits at retirement based on various factors such as age, salary and years of service with the company,” says Valerie McClendon, a financial advisor at Boston Wealth Strategies.