The employer promises to pay this benefit and holds assets in a trust in order to insure that money will be there to pay benefits when they are due regardless of the fortunes of the employer at that time. This trust assets are the property of the plan, not of the employee. Second, benefits typically may not be paid from a defined benefit plan until the employee retires. A defined benefit plan simply is not a realistic source of money for a creditor. Third, many defined benefit plans do not provide for lump-sum distributions of accrued benefits.
Many plans provide payments only in annuity form.
Thus, the benefits under a defined benefit plan often do not translate into a value that a creditor can immediately access. Fourth, because the benefit under a defined benefit plan does not become fixed until after the employee retires, it is difficult to identify the benefit to which a creditor's claim would apply. Even the present value of the benefit at any given time is dependent on current interest rates. Future changes in interest rates will change the value of the benefit. Fifth, the joint and survivor annuity requirements of defined benefit plans ensure that benefits are available for elderly surviving, creating an important resource against one of our most pressing retirement policy problems - providing retirement income for older women.