Is Social Security a form of defined benefit plan?

Yes, in theory. Social security promises you a monthly financial amount at your eligible age. For a defined benefit plan, the company is making annual contributions so that it can provide a monthly financial payment to an employee upon retirement.

However, at the end of the day, defined benefit plans for small businesses don’t usually turn out to work the same way. At some point the company closes, gets acquired or the plan is otherwise terminated. At this point, accumulated benefits are typically rolled over into an IRA.

So even though the plans are structured to work similarly, in practice funds are usually not distributed in the same manner.