I'm not at AC, but I came across
this. It's a little dated, but given what you're asking for is back in 2012, it should help answer some of your questions.
In a very generalized sense though (not specific to AC), a Defined Benefit (DB) plan is based on a formula that factors salary and time served. It would certainly be helped by your average earnings over the last few years, but then so would most retirement plans. The general idea of a DB plan is that you will be provided a guaranteed income in retirement. The advantage is that the employer takes on all contributing and investment decisions, leaving the employee free to do with their disposable income as they please without worrying (too much) about retirement. The employer invests this money into a fund or series of funds, the goal of which is to grow the money (just like any other retirement plan). The disadvantage is that all monies put into a DB plan are lumped into a single group - for example, pilots. All retired pilots then draw down from that fund. It's not individualized. If the fund runs out of money, all pilots lose. If the company is in dire straits, they often stop contributing to the pension. And, until earlier this year here in Canada, if a company collapsed and there was no language preventing it, creditors could take the pension as a company asset. However, the Federal Government passed a law earlier in 2023 that gave DB pension plan recipients priority over other creditors. To my knowledge, it's not been tested in court yet, but one concern of the new law was the potential for increased costs. I'm no expert in the field though, but that seems to tell me that increased costs could mean the plan doesn't last as long as it might otherwise would have. Although, I'd think we're talking in the timeline of months rather than years.
A Defined Contribution (DC) plan, again not specific to AC, is much more like an RRSP or 401K. The employee and employer put aside a set amount of money into an individualized plan. Like the DB plan, this money is then invested into a fund or series of funds chosen by the employee (not the employer). The advantage here is that the employee has much more control over the risk taken inside the fund and, because it is the employee's plan, should the company ever fail, the money cannot be garnished by creditors. The disadvantage is that there is less overall money for the fund to compound and there is no guarantee of how much you'll be paid out at the end. Also, should the company ever start going downhill, the employer may stop paying its share (I've been lucky to have only been laid off once in four downturns in my career, but in each case, the retirement payments were the first to go and last to come back. Back of the napkin math says they've not paid in for about 1/3 of my career).
I know most pilots would prefer a DB plan because it's mostly fire and forget, but then ask any pilot who retired in the years pre-and-post 9/11 how they thought their retirement would go versus how it is going. Or here in Canada employees of Sears and Nortel when lost a third to half their pensions. Granted that shouldn't happen anymore with the new rules, but I'm in favor of making my own retirement decisions, so I prefer the DC-type plans. But having never worked under a DB plan, I'm sure my opinion might change if I didn't have to set aside a percentage of my disposable income each pay.