What type of pension plan is the NEBF classified as?

The NEBF, or National Electrical Benefit Fund, is classified as a defined benefit plan. This type of pension plan provides participants with a predetermined payout upon retirement, which is calculated based on various factors such as salary history and years of service. The defined benefit model offers a guaranteed income during retirement, removing uncertainty about the amount that will be available for the retiree.

In a defined benefit plan, the employer typically funds the plan, and the responsibility for investment risk falls on the employer rather than the employee. This contrasts with defined contribution plans, where retirement benefits depend on the contributions made by the employer and/or the employee, and the investment performance of those contributions.

A hybrid plan combines elements of both defined benefit and defined contribution plans, which is not the case with the NEBF. Similarly, while a multiple employer plan can involve multiple employers contributing to a single pension plan, the NEBF specifically operates as a defined benefit plan for its members, ensuring consistent retirement benefits based on the defined formula.