What defines a defined benefit plan?

A defined benefit plan is characterized by its formulaic approach to calculating retirement benefits that employees will receive upon retirement. This means that the plan explicitly defines the amount of benefits that an employee will receive, typically based on factors such as years of service, salary history, and a predetermined formula. Therefore, option B accurately captures the essence of a defined benefit plan by stating that the amount of benefits is specifically determined.

In contrast, the other options do not accurately reflect the nature of defined benefit plans. While some retirement plans may be influenced by a company's earnings, that is not a defining characteristic of a defined benefit plan. Similarly, defined benefit plans do not allow employees to determine their own contributions or require them to invest a specific percentage of their salary; those attributes are more aligned with defined contribution plans, where contributions are made mainly by the employee and the retirement outcome depends on investment performance.