defined-contribution pension plan

Defined Contribution Plan

A retirement plan in which the employee and/or employer contribute a set dollar amount each month. The benefits of a defined contribution plan are not set, and depend upon how well the contributions are invested before the pensioner starts to make withdrawals. The disadvantage of a defined contribution plan is the possibility that the investments will not perform as well as expected, giving the pensioner a less secure retirement. The advantage is that the pensioner, while still making contributions, has the ability to determine how the contributions are invested, at least to a certain extent. See also: 401(k).

defined-contribution pension plan

A pension plan in which an employer's periodic payments into the plan, rather than eventual retirement benefits to employees, are specified. For example, a defined-contribution pension plan may require an employer to contribute 5% of its employees' gross pay into a fund with contributions earmarked for each employee upon retirement.
References in periodicals archive ?
In addition, the authors indicate that workers were more likely to reenter the workforce after retirement if they were younger, were in better health, or had a defined-contribution pension plan.
The Roth 401(k) is a feature that can be added to a new or existing company-sponsored defined-contribution pension plan, including traditional 401(k)s, safe-harbor 401(k)s, and 403(b) tax-sheltered annuities.
Contract talks between Swedish and SEIU 1199NW have dragged on since May, with the union repeatedly refusing to bargain the key issues of a 401(k)-style defined-contribution pension plan and premium sharing on health care.
The losses resulted from a change in Japanese accounting standards regarding fixed assets and Nissan's introduction of a defined-contribution pension plan, it said.
It also upheld the creation of a defined-contribution pension plan, similar to the 401(k) plans that have gained favor with private employers, for PERS-covered employees hired after August 2003.
The award adopts the new enhanced defined-contribution pension plan for new employees and provides current employees the choice--the same as for some other work groups and management--to move into the same enhanced defined-contribution plan or remain in their existing defined-benefit plan.
The airline and the pilots' union previously agreed to a new, defined-contribution pension plan that will replace the old defined-benefits plan.
This structure mandates that every (formal sector) worker pay 10 percent of earnings into a privately administered defined-contribution pension plan.
The award adopts the new enhanced defined-contribution pension plan for new employees and provides current employees the choice -- the same as for some other work groups and management -- to move into the same enhanced defined-contribution plan or remain in their existing defined-benefit plan.
Creating personal savings accounts or private accounts within the Social Security system would change it from a pay-as-you-go social insurance program to a hybrid with a defined-contribution pension plan component.
When this benefit-based pension plan was renegotiated in 1998 and replaced with a defined-contribution pension plan, his retirement age was raised from 55 to 58 years.
COLUMBUS, Ohio -- Nationwide Retirement Solutions -- a Nationwide Financial subsidiary -- has been selected by the Florida Retirement System Board of Trustees to be one of four companies providing bundled services for the state's new defined-contribution pension plan.