What triggers a "defined benefit" pension plan payout?

A "defined benefit" pension plan payout is typically triggered by retirement or reaching a specified age set by the terms of the plan. This type of pension guarantees a specific benefit amount to the participant based on factors such as salary history and years of service. When an individual retires or reaches the predetermined age outlined in the plan, they become eligible to start receiving these defined benefits, which are typically paid out monthly.

Choosing this option aligns with the core mechanics of defined benefit plans, as they are designed primarily to provide retirement income. Other situations, such as voluntary withdrawal from employment or penalties from early retirement, do not initiate the standard benefit payout process. Likewise, transfers of benefits, while administrative actions that occur within the context of the plan, do not directly trigger a payout to the participant in the same way that retirement or reaching a specific age does.