Defined-Contribution Plan

What Does Defined-Contribution Plan Mean?
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 you can withdraw these funds without penalties.

Investopedia explains Defined-Contribution Plan
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.

Filed Under: Personal Finance, Retirement

Related Terms

412(i) Plan
Advanced Funded Pension Plan
Cash Balance Pension Plan
Defined-Benefit Plan
Legacy Costs
Liability Driven Investment - LDI
Other Post-Retirement Benefits
Pension Plan
Pension Shortfall
Thrift Savings Plan - TSP
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