What is the difference between a benefit allowance plan and a contribution income plan?
Answers: A benefit pension plan gives a predetermined retirement amount. A rightly standard formula would be 1.5% X number of years worked X average pay for the last five years = monthly retirement check.
The contribution plan is usually a 401K near the company putting in a percentage match of your contribution. You get the investment decision from a list of funds. Whats within the pot when you retire is your retirement money to draw out over time.
Benefit plans are very rare anymore except for federation plans, government plans and a few old file companies. This is in part due to rule pension regulations that make it difficult to fully fund plans and the expense of such plans.