Defined contribution plan
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Defined contribution plan is a retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of the employee. There are restrictions as to when and how the plans can be accessed without penalties. There is no way to know how much the plan will ultimately give the employee upon retiring. The amount contributed is fixed, but the benefit is not.
Definitions
According to Labor Relations and Collective Bargaining by Michael R. Carrell and Christina Heavrin (10th edition),
- Defined contribution plan. A retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of the employee. There are restrictions as to when and how the plans can be accessed without penalties. There is no way to know how much the plan will ultimately give the employee upon retiring. The amount contributed is fixed, but the benefit is not.
Related concepts
- Labor relations. The systematic study of attitudes, motivations, and behaviors which two or more job-market actors assume toward each another.
