Employer sponsored retirement plan

(redirected from Employer-Sponsored Retirement 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 ?
Employer-sponsored retirement plans are providing less retirement income today than in the past, according to a new analysis from the Center for Retirement Research.
This year, to be eligible to be a finalist, advisers had to meet the following minimum criteria: having a majority of business revenue derived from employer-sponsored retirement plans, serving as a fiduciary, being committed to fee-based compensation and using outcome-based metrics of plan success with clients.
Among Millennials surveyed who currently participate in employer-sponsored retirement plans, 63 percent find them complicated and 57 percent feel intimated and uncertain, the report states.
It is statted that employer-sponsored retirement plans under $5m emerges as the fastest growing segment of the market, accounting for nearly 90% of all 401(k) plans.
Over the last decade, working women's access to, and participation in, employer-sponsored retirement plans has improved relative to men's, but they still face retirement security challenges.
CUNA Mutual said it provides investment options and administrative services to employer-sponsored retirement plans and applies an initial screening and ongoing monitoring.
The reasons: Hispanic Americans have saved less for their futures, are less likely to be covered by employer-sponsored retirement plans, and have inadequate financial literacy.
Additionally, the IRA was also intended to provide a place for transferring, or rolling over, balances from employer-sponsored retirement plans; thus giving both retiring workers and individuals who were changing jobs a way to preserve their employer-sponsored retirement plan assets.
published that finding in an analysis of data from MassMutual-administered employer-sponsored retirement plans.
Congress created individual retirement accounts (IRAs) with two goals: (1) to provide a retirement savings vehicle for workers without employer-sponsored retirement plans, and (2) to preserve individuals' savings in employer-sponsored retirement plans.
Max out of your 401(k) plan or at least make a real effort to contribute as a much as you can to employer-sponsored retirement plans.
Be aware that investment choices in employer-sponsored retirement plans may be limited.

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