Cafeteria Plan

What is a 'Cafeteria Plan'

A Cafeteria plan is an employee benefit plan that allows staff to choose from a variety of benefits to formulate a plan that best suits their needs. Cafeteria plan options may include health and accident insurance, cash benefits, tax advantages and/or retirement plan contributions.

Also known as "cafeteria employee benefit plan" or "flexible benefit plan".

BREAKING DOWN 'Cafeteria Plan'

Similar to a cafeteria where individuals select their food of choice, employees may choose benefits of their choice. These plans become more useful as diversity within workforces continues to grow. For example, the benefit needs of young families may differ greatly from those of a single person.

RELATED TERMS
  1. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
  2. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  3. Portable Benefits

    Benefits that have been paid into or accrued in an employer-sponsored ...
  4. Other Post-Retirement Benefits

    Benefits, other than pension distributions, paid to employees ...
  5. Group Health Insurance Plan

    An insurance plan that provides healthcare coverage to a select ...
  6. Plan Participant

    A plan participant either contributes into a pension plan or ...
Related Articles
  1. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  2. Retirement

    401(k) And Qualified Plans: Types Of Plans

    By Denise ApplebyDefined-Benefit PlansUnder a defined-benefit plan, employees' retirement benefits are predetermined by their compensation, years of service and age. For example, the plan ...
  3. Retirement

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
  4. Retirement

    The Basics Of A 401(k) Retirement Plan

    This plan has become one of the most popular retirement options. Find out why.
  5. Retirement

    This Is Why Your Employer Should Offer a 401(k)

    Understand the unique benefits that come with a small business offering a retirement savings plan such as a 401(k) to current and future employees.
  6. Retirement

    Is Your 401(k) Administrator Competent?

    The more that employees know about their employee 401(k) plans, the better. But what doesn't your administrator know?
  7. Financial Advisor

    The 4-1-1 on 403(b) Plans

    These plans resemble 401(k) plans in many respects, but are specially designed for nonprofit entities.
  8. Financial Advisor

    SEP vs. Keogh Plans: Which is Right for You?

    SEP and Keogh plans each have their pros and cons. Here's how to choose which one is right for you.
  9. Trading

    How And When To Switch Your 529 Plan

    Just as with any investment, you should review your plan to make sure it's meeting your needs.
  10. Retirement

    Save Safely With The DB(k) Retirement Plan

    Your retirement savings can have the best of the defined-benefit plan and the defined-contribution plan with this hybrid.
RELATED FAQS
  1. Are Cafeteria plans taxable?

    Find out which benefits offered through your employer-sponsored cafeteria plan are taxable, and which qualified benefits ... Read Answer >>
  2. Are Cafeteria plans exempt from Social Security?

    Find out what types of benefits your employer's cafeteria plan may offer and which benefits are exempt from Social Security ... Read Answer >>
  3. Are Cafeteria plans subject to FICA, ERISA or FUTA?

    Find out whether cafeteria plans are subject to ERISA, what they offer to employees and which benefits are subject to FICA ... Read Answer >>
  4. What is the best retirement plan option for a physician with her own practice, employees ...

    It is very unlikely that you will find a qualified plan or an IRA-based plan that will allow the employer to exclude other ... Read Answer >>
  5. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  6. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center