Yields and contributions define this classification
Pension plans can be defined, at the time they are established, with both the yield and the contributions to be made to the plan:
- Pension schemes have a defined benefit when the amount of the benefit to be received by beneficiaries is pre-defined. After the benefit is established, the contribution is obtained by applying the financial-actuarial system established in the pension scheme and the evolution of its returns.
- A contribution is defined when the amount of participants' and promoters' contributions is defined at the time when the pension scheme is created. Therefore, the amount of the benefit is not determined until the time of the contingency, due to the outcome of the capitalisation process developed by the scheme.
- And they are mixed when the amount of the benefit and the amount of the contribution are defined at the same time.