As the name suggests, the benefits of a DBPPs are defined in the plan agreement. The benefit is usually a formula based on the number of years you have worked or contributed, your average salary (or final year's salary), and a set percentage that may be tied to CPP. In a DBPP, the retirement benefit is defined, but the contributions are not.

A simple benefit formula for a DBPP might be as follows:
1.5% x NUMBER OF YEARS EMPLOYED x AVERAGE SALARY FOR FINAL FIVE YEARS.

Under this formula, if you worked for 20 years and had an average salary of $50,000 over the final five years of employment prior to retirement, you would have earned an annual retirement benefit of $15,000 or $1,250 per month.

Note: Defined Benefit Pension Plans generally benefit larger companies with many long-time and older employees.