Until 1987, the Internal Revenue Service didn’t allow firms to put more than $7,500 per partner into tax-advantaged pension plans each year. In 2000 and 2002 the IRS sharply increased the amounts that firms could set aside in defined benefit programs, and many law firms adopted the new plans as an alternative to their then common unfunded plans. Currently the maximum retiree benefit permitted under the tax-advantaged plans is $200,000; it rises yearly with the cost of living. (Non-tax-advantaged plans continue to have no benefit or contribution limits.)

Here is a guide to what many firms now offer: Defined benefit plan This is an umbrella term for any plan where the annual retirement benefit is determined by a set formula, including traditional plans and the newer-generation cash balance and variable-annuity plans. The formula establishing the benefit may incorporate past compensation, years of employment, age at retirement, and other factors.

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