How is a defined benefit plan different from a defined contribution plan? A defined benefit plan is a pension plan with plenty of investment risks while a defined contribution plan is a retirement plan where no investment risks are involved. A defined benefit plan is the traditional pension plan while defined contribution plan is a retirement plan where an employee defers some of her pay into the plan. In both defined benefit and defined contribution plans, the employer must make a contribution. A defined benefit plan is based on employee's salary history while a defined contribution plan is based on employee's length of employment