defined contribution plan
- A retirement plan creating an individual account for each employee, with funding generated by employer and/or employee contributions; the final value upon retirement is based on the total contributions made and the outcomes of their investment, such as with a 401(k) plan
- In a defined contribution plan, employees typically have more control over their investment choices.
- A benefit of the defined contribution plan is that the contributions are often tax-deferred until withdrawal.
- The company offers a generous defined contribution plan as part of its benefits package.
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