What characterizes Defined Benefit Plans?

Defined Benefit Plans are characterized by their promise to pay a specific benefit to employees upon retirement, which is typically calculated based on factors such as salary, years of service, and a predetermined formula. This structure provides a predictable retirement benefit to the employee, ensuring that they will receive a certain level of income after they retire, which is one of the primary features that differentiates Defined Benefit Plans from other types of retirement plans.

The other options do not accurately reflect the nature of Defined Benefit Plans. For example, the requirement for immediate fund deposits is not a characteristic of these plans; instead, they involve pooling resources to fund the promised benefits over time. Individual accounts are a feature of Defined Contribution Plans, which allow employees to contribute directly to their retirement savings, rather than relying on the employer's promise of future benefits. While some Defined Benefit Plans may be offered to executives, they are not exclusively used for this group; they are available to a broader range of employees in various organizations.