Employee Contribution Plan

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).
References in periodicals archive ?
Joe Haggerty, president of the United Way of Greater Los Angeles, said Arco has always been one of the nonprofit group's biggest supporters and had an active employee contribution plan.
Employers do not have to spend any extra money to implement these plans as they are employee contribution plans and the employer saves on payroll taxes.
Take control: Companies are starting to drop pension plans in favor of employee contribution plans, such as 401(k)s, primarily because they're less expensive.

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