401(a) Plan

Dictionary Says

Definition of '401(a) Plan'

A money-purchase retirement savings plan that is set up by an employer. The 401(a) plan allows for contributions by the employee, the employer, or both. Contribution amounts, whether dollar-based or percentage-based, eligibility, and vesting schedule are all determined by the sponsoring employer.

Funds are withdrawn from a 401(a) plan through lump-sum payment, rollovers to another qualified plan, or through an annuity.

Investopedia Says

Investopedia explains '401(a) Plan'

Employers are able to create multiple 401(a) plans, each with different eligibility criteria, vesting schedules and contribution amounts. For this reason, the 401(a) plan is commonly used by employers to create inventive programs to help retain employees.

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Related Definitions

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Articles Of Interest

  1. Must-Know Rules For Converting A 401(k) To A Roth

    In 2008, the IRS spelled out the details for converting employer-plan funds directly to Roth IRAs.
  2. The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  3. The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
  4. Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  5. Pension Law Could Reduce Your Payout

    Discover how this act negatively affects your lump-sum withdrawals.
  6. Business Owners: Avoid Enron-esque Retirement Plans

    If your business administers a retirement plan, you should recognize what's at stake.
  7. The Demise Of The Defined-Benefit Plan

    Experts are making bleak predictions for your post-work years. Be prepared and plan for your future.
  8. 3 Common Excuses For Not Contributing To A Retirement Plan

    If you're not participating in your employer-sponsored retirement plan, there may be some easy solutions.
  9. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  10. 6 Retirement Savings Tips For 45- To 54-Year-Olds

    Now is the time to kick savings into high gear. Find out how.

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