Cite as: 525 U. S. 432 (1999)
Opinion of the Court
These claims fail because the 1991 amendment did not affect the rights of pre-existing Plan participants and Hughes did not use the surplus for its own benefit.
To understand why respondents have no interest in the Plan's surplus, it is essential to recognize the difference between defined contribution plans and defined benefit plans, such as Hughes'. A defined contribution plan is one where employees and employers may contribute to the plan, and " 'the employer's contribution is fixed and the employee receives whatever level of benefits the amount contributed on his behalf will provide.' " Nachman Corp. v. Pension Benefit Guaranty Corporation, 446 U. S. 359, 364, n. 5 (1980) (quoting Alabama Power Co. v. Davis, 431 U. S. 581, 593, n. 18 (1977)). A defined contribution plan "provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant's account." ERISA § 3(34); 29 U. S. C. § 1002(34). "[U]nder such plans, by definition, there can never be an insufficiency of funds in the plan to cover promised benefits," Nachman, supra, at 364, n. 5, since each beneficiary is entitled to whatever assets are dedicated to his individual account.
A defined benefit plan, on the other hand, consists of a general pool of assets rather than individual dedicated accounts. Such a plan, "as its name implies, is one where the employee, upon retirement, is entitled to a fixed periodic payment." Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 154 (1993); see also Mead Corp. v. Tilley, 490 U. S. 714, 717 (1989); ERISA § 3(35), 29 U. S. C. § 1002(35). The asset pool may be funded by employer or employee contributions, or a combination of both. See ERISA § 204(c); 29 U. S. C. § 1054(c). But the employer typically bears the entire investment risk and—short of the consequences of plan termination—must cover any underfunding as the result of a shortfall that may occur from the plan's investments. See Connolly v. Pension Benefit Guaranty Corporation, 475 U. S. 211, 232 (1986) (O'Connor, J., concur-
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