Governmental employers can maintain tax-qualified plans of two basic types outside of CalPERS, either as a supplement to or a replacement for CalPERS. First, a defined benefit pension plan provides a stated benefit for employees upon retirement, usually based on a percentage of compensation multiplied by the number of years of employment. A defined contribution plan generally provides that the employer will contribute a stated percentage of employees’ compensation to the plan during their years of employment, and the employees’ benefit will be whatever those contributions and earnings add up to when the employees retire. In addition, a governmental employer can establish a 457(b) plan, with public schools also able to adopt a 403(b) tax-sheltered annuity program.