Defined Contribution Plan
The plan allows employers and/or employees to make annual contributions:
Annual contributions are fixed.
Retirement benefits are based on the accumulated contributions in individual employee accounts and on their investments returns.
Contributions are made to individual employee accounts.
Employees decide which investments their contributions will go toward, based on the choices presented to them by their employers. Accordingly, there is no government protection of their retirement benefits contributions under the defined contribution plans.
In the Real World: Various Defined Contribution PlansProfit-sharing plan
Stock bonus plan
401K plan
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