what is one disadvantage to having a defined benefit plan 
because a pension s payouts are determined by a formula if the stock market fares well employees with defined benefit plans may not benefit from the upside as much as those who have defined contribution plans such as a 401 k the bottom lineif you understand how a defined benefit plan works you can plan your retirement more strategically for example you might choose to work another year because working another year increases your benefits it increases the years of service used in the benefit formula this extra year may also increase the final salary your employer uses to calculate the benefit in addition there may be a stipulation that says working past the plan s normal retirement age automatically increases an employee s benefits 