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Employee Contribution Plan

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Employee Contribution Plan

An employer-sponsored retirement plan in which the employee makes contributions through payroll deductions. That is, rather than receiving the full amount in salary or wages, the employer automatically places a portion into the retirement plan on behalf of the employee. These contributions may or may not be tax deductible, depending on the type of plan. Sometimes, though not always, employers provide matching contributions for employee contribution plans. See also: IRA, 401(k).

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