Defined Contribution Plan
/ˌdɪˈfaɪnd ˌkɒntrɪˈbjuːʃən plæn/
Definitions
- (n.) A retirement plan in which the employer, employee, or both make specified contributions to individual accounts, with benefits based on the account value at retirement.
Employees can often choose investment options within their defined contribution plan to maximize retirement savings.
Forms
- defined contribution plan
- defined contribution plans
Related terms
See also
Commentary
Defined contribution plans shift investment risk to the employee, unlike defined benefit plans which promise specified payouts.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.