defined benefit plan

MPERS operates as a tax-qualified defined benefit plan (DB) under Section 401(a) of the Internal Revenue Code. A defined benefit (DB) plan requires a member to be vested (work a set number of years in a benefit-eligible position) and provides a set benefit (based on salary and creditable service) for life, once a member meets the age and service requirements for retirement. In other words, the “benefit” is “defined” by the law. A DB plan can be either contributory or noncontributory. The Closed Plan and the 2000 Plan are non-contributory DB plans. The 2011 Tier is a contributory DB plan, in which members contribute 4% of their pay to the retirement system.