defined contribution plan

Definition of "defined contribution plan"
  1. 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
How to use "defined contribution plan" in a sentence
  1. In a defined contribution plan, employees typically have more control over their investment choices.
  2. A benefit of the defined contribution plan is that the contributions are often tax-deferred until withdrawal.
  3. The company offers a generous defined contribution plan as part of its benefits package.

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