Employer sponsored retirement plan

(redirected from Employer-Sponsored Plans)

Employer Sponsored Retirement Plan

A retirement plan in which both an employer and an employee make contributions into an account each month. The contributions are invested on behalf of an employee, who may begin to make withdrawals after retirement. Typically, employer sponsored retirement plans are tax-deferred, meaning that the employee does not pay taxes on the funds in the pension until he/she begins making withdrawals. However, some plans are not tax-deferred, and, instead, employees make tax-free withdrawals. Employers are not legally required to offer retirement plans, though most major companies do. Plans may have defined contributions, defined benefits, or both. See also: 401(k), IRA.

Employer sponsored retirement plan.

Employers may offer their employees either defined benefit or defined contribution retirement plans, or they may make both types of plans available.

Any employer may offer a defined benefit plan, but certain types of defined contribution plans are available only through specific categories of employers.

For example, 403(b) plans may be offered only by tax-exempt, nonprofit employers, and 457 plans only by state and municipal governments. SIMPLE plans, on the other hand, can only be offered by employers with fewer than 100 workers.

Corporate employers who contribute to a retirement plan can take a tax deduction for the amount of their contribution and may enjoy other tax benefits. However, the plan must meet certain Internal Revenue Service (IRS) guidelines.

Offering a retirement plan may also make the employer more attractive to potential employees. However, employers are not required to offer plans. If they do, they can make the plan as generous or as limited as they choose as long as the plan meets the government's non-discrimination guidelines.

References in periodicals archive ?
This type of individual retirement account will grant you access to a broader array of investments that often have lower fees than employer-sponsored plans.
For more than 50 years, Lincoln Financial Group's Retirement Plan Services (RPS) business has been helping savers boost their retirement readiness through employer-sponsored plans.
Average employee premiums for all employer-sponsored plans rose from USD 509 in 2016 for single coverage to USD 532 in 2017 and from USD 1,236 to USD 1,272 for family coverage (a 4.
The bottom line is that employer-sponsored plans are providing less income today than in the past," the report states.
According to the Insured Retirement Institute, "In taking this action, the Senate has ensured that the high level of ERISA protections workers receive when they participate in a workplace retirement savings plan, including those sponsored by municipal governments, as well as private employer-sponsored plans, will be maintained.
The number of employers affected would be relatively small at the start but would grow over time as more employer-sponsored plans exceed the premium threshold that triggers the tax.
This year, 30 percent of respondents said they have savings in one or more employer-sponsored plans, up from 22 percent in 2014 and 15 percent in 2013.
The auto enrollment feature puts the federal marketplace in line with the Federal Employee Health Benefits Program (FEHBP) and many employer-sponsored plans.
CBBC's survey concluded that the ACA is driving up costs for businesses, thus impacting current and future employees through the loss of employer-sponsored plans and affecting hiring practices.
Accenture s research estimates that out-of-pocket collections from patients with employer-sponsored plans will increase by 7 percent or an additional $3.
The Milliman report also noted that Silver plans are nearly four times more likely to have a single combined deductible for medical and pharmacy benefits (46% of the time) compared to typical employer-sponsored plans (12% of the time).
Many employer-sponsored plans operate on a calendar year, so most women insured this way saw the change kick in on January 1, 2013.

Full browser ?