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 ?
* 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.
The two sources for funding retirement are lifetime corporate pensions and private 401(k) employee contribution plans, which are both in crisis as baby-boomers live longer and their income shrinks.

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