DB, DC and IRP retirement pension plans

Defined benefit (DB), defined contribution (DC) and individual retirement pension (IRP) plans differ in who bears investment risk and how retirement benefits are paid.

Checked 2026-09-23 · Estimates and reference information, not legal or tax advice.

At a glance

A DB plan promises a benefit based on a defined formula; the employer manages funding risk. In a DC plan, the employer’s contribution is defined and the account outcome depends on investment performance. An IRP is an individual account used to receive or manage retirement benefits.

DB plan

The employer is responsible for paying a benefit at least at the legally required level under the plan rules. Recent pay and length of service can affect the amount.

DC plan

Employer contributions are based on the required contribution formula, commonly at least one twelfth of annual wages. Investment gains and losses affect the balance.

IRP account

Retirement benefits are commonly transferred to an IRP except where an exception applies. Withdrawal timing and tax treatment should be checked before making an election.

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Sources

These Korean-language sources were checked on 2026-09-23. Laws and rates may have changed; consult the originals before an important decision.