A single-contract pension commitment is an agreement between an employee and an employer that ensures a fixed pension income upon retirement. Some synonyms for this type of commitment include "defined benefit plan," "final salary scheme," or "guaranteed pension plan." These terms all refer to the same concept of providing a set pension payout based on a predetermined formula, usually calculated by the employee's length of service and final salary. Such plans provide a level of security and stability for retirees, as they are not subject to market fluctuations or investment risks. However, they can also be costly for employers and become financially unsustainable, leading many companies to offer alternative retirement benefits such as 401(k)s and IRAs to their employees.