The retirement benefit is fixed, generally as a percentage of pay in Defined Benefit plans. The contribution will be whatever funding is required to provide the benefit for each employee at retirement and is actuarially determined. The maximum benefit allowed is 100% of compensation with maximum limits as set by the IRS. This maximum amount is indexed each year for cost of living adjustments. This plan is not flexible as to the funding requirements and is generally more expensive to administer and maintain due to the IRS and actuarial requirements. This type of plan generally favors older, higher paid employees and is for the employer who is looking for greater deduction limits.