How is the term "hybrid" used in the context of retirement plans?

In the context of retirement plans, the term "hybrid" specifically refers to a plan that combines elements of both defined benefit and defined contribution plans. This hybrid structure typically seeks to balance the predictable, defined benefits characteristic of traditional pension plans with some of the features of defined contribution plans, such as individual accounts and contribution flexibility.

For example, a hybrid plan might guarantee a minimum benefit at retirement while also allowing for additional contributions based on employee earnings or job tenure that can be invested similar to a 401(k). This structure helps to manage risks for both employers and employees, as it provides some level of retirement security while also encouraging individual savings and investment.

The other options do not capture the full scope of the hybrid plan concept. Employee stock ownership plans focus specifically on company stock and do not relate to the hybrid model's balance of benefits. A plan exclusively for part-time employees does not define a hybrid arrangement, nor does a government-only retirement program accurately describe a hybrid setup. The essence of hybrid plans is their dual nature in incorporating features from both defined benefit and contribution frameworks.